Microsoft disbands its Live Labs group

Microsoft is disbanding Live Labs -- its showcase group comprised of a mix of Microsoft researchers and MSN team members -- PaidContent.org has reported.

Update: Microsoft is characterizing the move as a restructuring of the team. Roughly half the team is being moved into other Microsoft product groups, a spokesperson said. The remaining half of the Live Labs team members who remain on the team will focus on search and data retrieval and discovery projects, the spokesperson said.

Microsoft execs often touted Live Labs as proof that Microsoft is an innovator, not just a follower.

But in recent months, some of Microsoft's Live Labs projects were axed and put on hold. The Live Labs managed to find a home for the PhotoSynth group inside the company.

According to PaidContent, Microsoft is citing economic pressures for the disbandment of the group.

I'm wondering what's going to happen to Gary Flake, the former founder of Yahoo's research labs, who is currently head of the Labs. No word back on that question yet from Microsoft. Flake will continue to run the part of the Live Labs team that will continue to exist, the aforementioned spokesperson said.

I also wonder what the closing of Live Labs means for other similar teams inside Microsoft, such as Office Labs, adLabs, Startup Labs, etc.  If and when I hear more, I’ll add to this post. For now, at least, it appears those teams will continue to run as usual.

Update No. 1: Statement from a company spokesperson: "Live Labs is not actually shut down; rather parts of the team have been moved to other product groups at the company.  Live Labs still remains but in smaller form."

Update No. 2: News.com's Ina Fried is quoting another Microsoft spokesperson as saying Flake will continue to manage the part of Live Labs that continues to exist.

On a related note, former Live Labs design director Don Lindsay has left Microsoft and joined RIM, according to mocoNews.Net.