Microsoft’s New Head of FUSE Labs, Lili Cheng, on Strategy, Social Computing, and Bicoastal Life

Microsoft’s latest reorganization, which involves labs in both the Seattle and Boston areas, has a new face. It’s Lili Cheng, a 14-year Microsoftie with experience in both research (social computing) and products (Windows Vista user experience). Cheng now officially leads three separate groups that are being rolled into one: her Creative Systems Group within Microsoft Research in Redmond, WA; Rich Media Lab led by Kostas Mallios, also in Redmond; and Startup Labs in Cambridge, MA, led by Reed Sturtevant.

Yesterday, chief software architect Ray Ozzie announced the creation of the new entity, called FUSE (Future Social Experience) Labs, which will focus on social computing as applied to Microsoft products in entertainment and business. Sturtevant, the founding managing director of Startup Labs, is leaving the company, while Mallios will continue to report to Ozzie and is taking on business development duties involved with technology incubation.

But back to the lab’s new head, who spoke with me from Cambridge yesterday. Cheng, after inheriting about 70 staff members from Startup Labs and Rich Media Lab, now manages about 80 people in FUSE Labs, and says she will be splitting her time between the Seattle and Boston areas. She said the employees of Startup Labs (there are 30-some staff members) will be staying in Cambridge.

As Cheng explains, the goal of FUSE Labs is to “bridge the gap” between research and products—an oft-heard refrain at Microsoft (and most big companies)—by working on projects that are two to five years away from commercialization, and interacting closely with product teams.

The specific focus of the lab is social computing—applying social media (things like Twitter, Facebook, and other social-network technologies) to problems in business collaboration and entertainment. The high-level strategy here is to “embed social activity into business scenarios” for Microsoft, Cheng says. She didn’t say anything more specific about Microsoft’s plans for social media, or about how the employees in Startup Labs and Rich Media Lab will be integrated into the social theme. But she adds, “Interacting with other people is so personal and emotional to every single person out there. It’s important for every company out there.”

Cheng’s team has previously built applications like Kodu, which lets kids create games and stories using an Xbox controller and share them on a community games channel; and Salsa, a prototype that connects your e-mail inbox with social networks. (The latter sounds a lot like what the Seattle startup Gist, led by ex-Microsoftie T.A. McCann, has built and is actively testing.)

Asked what her greatest challenge is in the new job, Cheng said it’s addressing how to “take best advantage of this amazing opportunity.” Having been in the social computing space for many years, she says, now it’s time to “just go for it.”

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