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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Ray Ozzie, Microsoft’s chief software architect, announced today the company is forming a new laboratory called Future Social Experience Labs, or FUSE Labs, which will focus on aspects of “social computing” beyond just communication and collaboration. The move is part of a wider restructuring of Microsoft’s labs: FUSE Labs is a merger between the Creative Systems Group at Microsoft Research in Redmond, WA; Rich Media Labs; and Startup Labs in Cambridge, MA. As part of the announcement, Ozzie said Reed Sturtevant, the founding managing director of Startup Labs for the past two years, is leaving the company to pursue other interests.

FUSE Labs will be led by Lili Cheng, a 14-year Microsoft veteran who most recently headed the Creative Systems Group and previously managed the user experience teams for Windows Vista. Before joining Microsoft, Cheng worked at Apple Computer in the human interface-advanced technology group, where she worked on QuickTime VR and QuickTime Conferencing products. Cheng is now general manager of FUSE Labs (in Redmond) and will report directly to Ozzie. “I’ve known Lili for many years, and have long been impressed by her vision and ability to create; to engage yet to also inspire; to lead; to make tough choices; to deliver,” Ozzie said in a memo to Microsoft staff.

Ozzie said he has “refined the missions” of Microsoft’s labs, in part because of “changing business conditions.” From his memo, it sounds like the goal of the new lab is to apply research in social computing (things like user interfaces, social networks, and human behavior) to help develop new products in the areas of entertainment, productivity, and teamwork—as well as to explore how Microsoft can extend the ways people use computer operating systems.

“The three groups being combined have concrete skills and code in areas where ‘social’ meets sharing; where ‘social’ meets real-time; where ‘social’ meets media; where ‘social’ meets search; where ‘social’ meets the cloud plus three screens and a world of devices,” he said. (See more on Ozzie’s three-screen vision here.)

It also sounds like the reorganization is meant to focus the impact of social computing research more immediately on the company’s product pipeline. “FUSE Labs will bring more coherence and capability to those advanced development projects where they’re already actively collaborating with product groups to help them succeed with ‘leapfrog’ efforts,” Ozzie said in his memo. “Working closely with [Microsoft Research] and across our divisions, the lab will prioritize efforts where its capabilities can be applied to areas where the company’s extant missions, structures, tempo or risk might otherwise cause us to miss a material threat or opportunity.”

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Barely two years after he joined Microsoft here in Cambridge, MA, to launch its new Startup Labs, Reed Sturtevant is leaving the company to “pursue other interests,” Microsoft announced today.

Sturtevant’s departure was part of a broader announcement that Ray Ozzie, to whom Sturtevant reported, had reorganized his group to create the new Future Social Experience (FUSE) Labs, which will be focused on social computing. The lab will be headed by Lili Cheng, and will take the Microsoft Startup Labs in Cambridge under its auspices, along with another group previously part of Ozzie’s organization, the Rich Media Labs.

“FUSE Labs’ team will explore new social, real-time and media-rich applications and services that add value to existing products, or could be released on their own,” Microsoft said in a statement. “By combining these teams under a single leader and mission, Ray believes FUSE Labs can achieve greater impact through tighter focus and a more holistic approach. “

Sturtevant is a well-known and highly respected figure in New England computing, and beyond. He was most recently CTO at Eons before joining Microsoft to start the Startup Labs, an advanced development lab meant to help explore new ideas and speed them to market.

Sturtevant declined to comment on his departure, but you can read a lot about his background here.

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Flame-thrower enthusiasts and giant dinosaur puppet-makers of the world, rejoice. The Awesome Foundation for Arts and Sciences wants to support your efforts. Starting in July, the new Cambridge, MA-based “microtrust” will be giving out one grant each month in the spirit of supporting creations that evoke “surprise and delight.” The application process is simple: explain your activity, project, or research idea in 500 words or less. Sufficiently awesome ideas will net their creator $1,000 and a month’s workspace in Beta House, the creative and technological work co-op in Cambridge’s Central Square.

But what lends an idea awesomeness? “It’s something ambitious. Outlandish. Unexpected,” says Tim Hwang, the founding member of the Awesome Foundation. The winning idea could be a computer program, an art project, a machine, or some unforeseen combination of the three. “We’re intentionally keeping it vague,” says Hwang. The foundation is reluctant to define “awesome” too rigidly, he says, for fear of restricting grantees’ creativity.

Ideas do not have to include a business model, though the Awesome Foundation is not averse to supporting a for-profit project. “We’re agnostic as to whether or not you’re going to make money off your idea,” Hwang says.

A researcher at Harvard’s Berkman Center for Internet and Society and the Web Ecology Project, Hwang came up with the idea for the Awesome Foundation while immersed in the grant application process. Applying for funding, he says, “is a really depressing thing. People get really excited about their idea, but run up against the bureaucratic nature of grants.” He hit upon the idea of creating a “microtrust” where a group of people would commit to donating a small amount of money—$100 a month. The money would be given free of any stipulations or strings. In early June, Hwang announced on his blog that he was looking for 10 people to contribute and form the first board of the Awesome Foundation.

Reed Sturtevant is one of Hwang’s “microtrustees.” When not funding awesomeness, he manages Microsoft’s Startup Labs in Cambridge. He sees his involvement with the Awesome Foundation as a way of giving back and encouraging entrepreneurial spirit. $1,000 might not seem like much, Sturtevant says, but “so many people just do amazing things for no reason. There are great creative people and ideas that just need a little spark to help them come forth.”

The application form for an Awesome Grant went online last Friday. By the end of the first day, the foundation had already received 30 prospects, Hwang says. Aside from a few joke applications (such as this one from “Mahmoud Ahmadinejad”: “I need funds to help fix an election in my country. Funds will go to paying people to vote for me, changing votes, lashing out at Western media, and getting my snazzy beard trimmed”), the ideas have run the gamut from technical to artistic. The first winner will be announced near the end of July. Hwang says the only thing the foundation asks of the winner is to show off their work at the end of their month at Beta House.

“We’re thinking of ordering a big checkbook,” Hwang said, “and some of those big scissors to do a ribbon-cutting.”

Awesome.

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We just got another great prize to give out to one lucky attendee of our upcoming XSITE 2009 event: a Garmin Nuvi 310 GPS unit, courtesy of the generous souls at the MIT Sloan CIO Symposium. Only the next 10 folks to buy tickets for XSITE—the Xconomy Summit on Innovation, Technology, and Entrepreneurship—will be eligible to win the system, which includes a car mount kit, car charger, carrying case, USB cable, and map software for North America. So if you head to the registration site quick enough, that means you’ll have a one in 10 chance to recoup almost the whole value of your XSITE ticket, which is already a great value.

Indeed, XSITE—which will be held at Boston University on June 24—will be chock full of leading innovators, executives, and investors. We’ll have keynotes by Dean Kamen and Juan Enriquez and panels and presentations from the likes of Yet-Ming Chiang of MIT and A123Systems, Boston-Power’s Christina Lampe-Onnerud, Reed Sturtevant of Microsoft Startup Labs, Dartmouth’s Tillman Gerngross, Alnylam CEO John Maraganore, Sirtris CEO (and GlaxoSmithKline SVP) Christoph Westphal, and EMC CTO Jeff Nick.

Then there’s the unveiling of two stealth companies, one of which, Taris Biomedical, we are giving an early sneak peak of today. And the day will be capped off by the XSITE Xpo, which will feature rapid-fire presentations from a dozen of New England’s most potentially transformative companies in cleantech, life sciences, and information technology.

You can check out the whole agenda here, and you can register here. Register quickly to secure your chance to win the GPS system (as always, Xconomy employees, underwriters, and investors are not eligible to win). Then you will have no problem navigating to XSITE 2009. We hope to see you there.

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In case you haven’t noticed it, the recovery is underway. The economy is affecting all aspects of business, of course. But every day here at Xconomy we write about the unrelenting pace of innovation and see firsthand how, if anything, the pace has picked up during the recession—nothing like hard times to get the creative juices flowing, it seems. The current outpouring of new products, ideas, and companies spans many fields, from biotech to computing, mobile devices, robotics, energy, and more—with the potential to affect all aspects of our lives. And it’s this torrent of innovation, not any bailouts or stimuli, that will drive us out of recession and ensure future U.S. competitiveness.

Because New England is a world leader in high-tech innovation, we’ve decided it’s high time to move past all the doom and gloom surrounding the economy and highlight and celebrate innovation in the region in a new, and bigger, way. To that end, we are extremely pleased today to announce XSITE 2009—the Xconomy Summit on Innovation, Technology, and Entrepreneurship, a full-day event that will be held on June 24 at Boston University. We have partnered with BU’s Office of Technology Development to hold XSITE 2009, the first of what will become an annual conference focused on innovation in New England. The event will take place at BU’s School of Management on Commonwealth Avenue. And we are honored that BU President Bob Brown will be giving the welcoming address.

XSITE will bring together innovators from every sphere of the innovation community—across all the disciplines I mentioned above and more, and across institutions including universities, venture firms, startups, and the biggest public companies operating in the region.

We are thrilled with how well the idea of this summit has resonated with leaders in all these areas and institutions. Just a sampling of the many luminaries who will be taking part in XSITE includes: Juan Enriquez of Biotechonomy, who will deliver a keynote address; Nobel Laureate Phil Sharp of MIT; Jeff Nick, chief technology officer of EMC; Reed Sturtevant, managing director of Microsoft Startup Labs; Alnylam Pharmaceuticals CEO John Maraganore; Boston Power CEO Christina Lampe-Onnerud; Boston Scientific co-founder John Abele; Mohamad Ali, IBM’s senior state executive for MA; Yet-Ming Chiang, co-founder of A123Systems; and Mick Mountz, CEO of industrial robot maker Kiva Systems.

Startup aficionados, meanwhile, will have lots to love about XSITE, which will feature some of the coolest and most promising young companies in New England. In addition to Kiva, these include black silicon developer SiOnyx, fat-busting firm Zafgen, “roadable” airplane maker Terrafugia, Web video audience tracking firm Visible Measures, and Satori Pharmaceuticals, which is developing a pill to fight Alzheimer’s disease. We will also lift the curtain on several stealth-mode startups at the summit (of course we aren’t naming them yet).

And summit attendees will have a chance to share their own ideas about innovation in a variety of ways, including during the XSITE Xpo, a dynamic session in which a dozen of New England’s most promising startups will tell their stories and audience members will pick which firms will likely be the most transformative in the years to come.

We will be revealing more about the event in the next few weeks. On Twitter, follow us at @XconomyXSITE (hash tag #xsite09) and see our current lists of speakers and get registration details at www.XSITE2009.com. We look forward to seeing you on June 24.

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A standing-room-only crowd gathered yesterday for Xconomy’s Forum on the Future of Mobile Innovation in New England, hosted by Microsoft at its gorgeous new New England Research and Development Center (or NERD, as Microsoft’s Reed Sturtevant called it). Google’s Rich Miner, MIT’s Sandy Pentland, and two panels’ worth of mobile entrepreneurs were on hand to share their latest thinking about the best ways for startups to gain and maintain a foothold in the mobile industry.

If there was a single takeaway message from the event, I’d say it was this: It’s a time of great ferment in the mobile industry, with carrier restrictions on the distribution of consumer-oriented mobile applications finally breaking down. But it’s very difficult to build a sustainable business around a single application or a single mobile platform—so companies need to think flexibly about the audiences and platforms they develop for, the amount of capital they really need (and the sources from which they’ll raise it), and the combinations of revenue opportunities they’ll pursue.

Next week we plan to post some video outtakes from the event, but today we’ll round up some of the highlights:

—Xconomist Mark Lowenstein, the managing director at consulting firm Mobile Ecosystem, set the scene with a few statistics and observations. Mobile companies raised $500 million from New England venture investors last year, and have raised $5 billion cumulatively, he noted. The traditional barriers to entry in the mobile industry—the wireless carriers’ traditional protectiveness about giving access to cell phone “decks” or top-level menus to third-party application developers, for example—are falling fast. New England companies, with their longtime focus on good user interface design, are well positioned to take advantage of this change, Lowenstein said.

—Ted Morgan, CEO of Skyhook Wireless, said his company has just added the 100 millionth access point to its global database of Wi-Fi network locations, part of its WPS location finding system. He said getting WPS onto the Apple iPhone and iPod Touch platforms was the key moment in Skyhook’s progress—but that, ironically, he dismissed Apple CEO Steve Jobs’ first call about the deal back in 2007 as a prank.

—Jamie Hall, the president of MocoSpace, said the mobile social network has grown to 6 million members, who view 2 billion pages every month. The key to MocoSpace’s success in mobile social networking—a business in which several other companies have dabbled without much success—was circumventing the carriers by doing everything “off-deck,” creating room for constant innovation and upgrades.

—Mort Rosenthal, CEO of Enterprise Mobile, said that even though Microsoft is the mobile device provisioning company’s sole investor, “If it’s a debate between Microsoft and the customer, the customer wins.” While the company specializes in deploying Windows Mobile devices into enterprises, it also works with other platforms, because customers demand it. And while the fragmentation of mobile technology across dozens of major devices from several large carriers is a bugaboo for most mobile companies, it’s actually what Enterprise Mobile thrives on. “An enterprise does not want a free-for-all,” Rosenthal said. “We [give them] one throat to choke.”

—Dave Grannan, CEO of vlingo, said his company realized early on that the mobile ecosystem wasn’t yet open enough to get vlingo’s mobile speech recognition system out to lots of users without a major strategic partner with existing carrier relationships. That partner turned out to be Yahoo—and while Grannan called landing the deal to get vlingo’s voice-driven interface built into Yahoo’s mobile platform “luck,” he also said it took persistence. It wasn’t until the fourth meeting with Yahoo that vlingo was able to convince the company to take a look at its technology. (And then Yahoo suddenly wanted to buy vlingo—but the startup was “not for sale,” Grannan said.)

—Jason Jacobs, CEO of FitnessKeeper, said there have been 300,000 downloads of his startup’s RunKeeper GPS fitness application for the iPhone 3G, with a surprisingly high percentage of users (he intimated 4 or 5 percent or more) of the free app converting to the paid “RunKeeper Pro” app. That’s creating enough revenue to cover the company’s current burn rate—which is low, because many of the FitnessKeeper team members are being paid in equity and the only full-time employee is Jacobs himself. The trick for FitnessKeeper, Jacobs said, will be to …Next Page »

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Back in September, we talked to former Eons chief technology officer Reed Sturtevant just before his first day on the job as the head of a special Microsoft advanced development lab opening in Kendall Square, right next to MIT and a stone’s throw from Google’s own lab. An update late last year brought the news that Sturtevant was set to make his first hires, but since then we’ve heard little else. Today, there is a bit more news from a Boston Globe article that says Sturtevant has hired roughly a dozen workers—on his way to 30 in the near term and much more if the lab proves a success—that are working on a variety of advanced concepts in areas including social networking, search, and organizing and prioritizing e-mail.

The lab, called the Boston Concept Development Center, is housed at One Memorial Drive, a 17-story luxury office building in which Microsoft has leased five floors. The building, for instance, already houses employees of the company’s SoftGrid unit (the new name for Softricity, a Boston firm acquired in 2006). It will also play host to the new Microsoft Research lab that Wade wrote about in February, which will be opening later this summer. (The facility will be the company’s first East Coast research lab and its third in the U.S.) Sturtevant’s team will be based on the 10th and 11th floors, which will be connected by a large staircase.

While Sturtevant still isn’t giving out a lot of detail, he told the Globe one of his team’s projects will focus on developing social-networking software to help families communicate and interact (speaking as the parent of two teenagers, I’ll take a dozen). Such software reportedly would work across computers and cell phones and, among other things, be able to track family members via GPS technology (not sure I want to know). The project seems to be part of a broader effort at the lab to investigate multi-device applications that improve social networking.

Another effort is aimed at e-mail overload—creating new ways of prioritizing e-mail, I gather so you don’t get too bogged down in what’s not that important. A third focus, according to Rob Weisman in the Globe, “will look for ways to improve search and ‘crowdsourcing,’ the same technologies that have been driving the growth of Google and Facebook.”

As we have previously noted, Microsoft has three large business divisions. Sturtevant’s lab will not be part of any of them, nor will it be part of the worldwide Microsoft Research organization. Instead, it will serve as a unit of chief software architect Ray Ozzie’s group. New Englander Ozzie and his brother, Jack (to whom Sturtevant reports), personally recruited Sturtevant. The three have known each other since their days at Lotus together in the 1980s.

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There isn’t any shortage around here of potential collaborators and job seekers eager to work with Jennifer Tour Chayes, managing director of Microsoft’s newest research outpost, Microsoft Research New England. Chayes tells Xconomy that by 11:00 am Eastern time today, less than five hours after news of the lab’s creation hit the New York Times and the Boston Globe, she had already received more than 100 e-mails from the East Coast—about 80 percent of them from researchers at MIT, Harvard, Boston University, Brown, and Yale “telling us how excited they are and that they want to interact with us,” in her words.

Microsoft already has a major presence in Cambridge and greater Boston: in addition to the Boston-area employees of recently acquired companies such as Groove Networks, Softricity, and Fast Search & Transfer, the company is hiring staff for a new product-oriented “concept development center” adjacent to the MIT campus under the leadership of former Eons CTO Reed Sturtevant. But when Microsoft Research (MSR) comes to town, the academic world pays attention.

Chayes, 51, is the first woman appointed to lead a Microsoft Research lab and is a pioneer in areas of mathematics and theoretical computer science—such as network and graph theory, recommendation systems, and search filtering—that have increasing relevance in a world of Web-based communication and commerce. Chayes and her husband and close collaborator Christian Borgs, who will be the lab’s deputy managing director, have already begun to outline a vision for an interdisciplinary research center that will link experts in economics, psychology, and sociology with computer scientists who can translate their insights about human behavior into algorithms that will improve the growing range of products that Microsoft delivers over the Web.

“I think that putting the basic mathematics together with basic research in sociology, psychology, and economics will allow us to come up with the insights that we need to deliver a much better experience to our customers online,” says Chayes, who was formerly the research area manager for mathematics, theoretical computer science and cryptography for MSR Redmond and has been named as the Cambridge lab’s managing director.

The new group, to open in July in newly renovated space at One Memorial Drive, will be only a few stair-steps away from the product development groups that can translate its research findings into real software features—and from the new concept-development group headed by Sturtevant. “We’re really excited about that,” says Chayes. “We do long-term research and we come up with basic insights, but if there is some of that that can actually be turned into products, there is nobody better in the world to do it than Reed.”

Sturtevant, for his part, says the decision to open a Cambridge branch of Microsoft Research is “a real step forward for our emerging ‘vertical campus’ in Kendall Square…Having basic research, concept development and incubation, and full product development together at one site will bring great creative energy.”

To ensure communication between the groups, Chayes says the construction plans at One Memorial Drive include a space large enough for MSR staff and Sturtevant’s group to gather every afternoon for tea. “I’m a big believer in breaking bread,” says Chayes. “Probably a quarter of the projects in our theory group have started over our daily teas. People who wouldn’t ordinarily talk to each other start talking to each other, and before you know it they are writing on the walls and modeling.”

Chayes says she and Borgs haven’t yet identified the exact projects the new lab will pursue—that’ll have to wait until they can brainstorm with new staff members face-to-face. But it’s fair to predict that some of the work will reflect …Next Page »

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Last September Bob broke the story that Reed Sturtevant, the longtime chief technology officer at Eons, Boston’s social networking site for the 50-and-over crowd, had accepted a job heading up a new Cambridge, MA-based development lab and innovation group for Microsoft. Sturtevant’s departure came shortly after Eons had laid off a third of its staff and cut several under-performing sections of its website.

But Eons has now filled the CTO vacancy, hiring Eric Golin, a “serial engineer” who has held the CTO posts at Content Objects, a compliance and risk management support company in Cambridge; Argo Technology, a Newton, MA, company that developed unified information management tools for consumers; and Broadvision, an e-business software provider based in Redwood City, CA.

“I’m getting very close to 50, and the baby boomer social applications space we’re after is very exciting for me,” says Golin, who will have responsibility for Eons’ technology platform. “A lot of the people I talk to have a profile on Facebook or LinkedIn, but those are communications tools, not really environments where people of my age group want to connect and engage outside the work environment, or to really find something that energizes them and adds to their life. There is a huge opportunity to build that kind of online community focused on spirited baby boomers.”

Golin says he was already doing consulting work for Eons when Sturtevant announced his departure for Microsft and has been handling parts of the CTO role ever since. He says the technology team at Eons has been focused on building up the community-networking aspects of the site, which customers said were more important to them than now-defunct features such as obituaries.

“One of the things that was very critical back in September was recognizing that what the customers really wanted was this online community, the social networking aspect, so we’ve been working very hard to focus all of our efforts and resources into that area,” says Golin. “I’m excited about the applications we’re building, we’ve got a great team, and I like having the chance to do something that feels meaningful to people. And with 700,000 users, we’re at a very good starting point.”

At the same time, Eons announced the appointment of a new design director, Tom Churchill, who will provide creative direction for the Eons website. Churchill is a veteran of Boston social media site Gather.com and travel distributor World Travel Holdings, where he led efforts to build e-commerce software for travel brands such as Expedia, Orbitz, and Yahoo Travel.

“It’s really exciting to have Eric and Tom as part of our team at Eons,” Jeff Taylor, Eons’ founder and CEO, said in the company’s announcement about the hirings. “They both know what it takes to create a fun and fulfilling experience for online users. Their combined talent and knowledge will play a key role in the next phase of Eons as we continue to deliver the best platform for boomers who want to keep in touch with their friends, rekindle old relationships, and create new connections with like-minded adults who share their passions, interests and experiences at this stage of life.”

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Got this photo in an e-mail from Reed Sturtevant, who’s creating a new Microsoft advanced development lab in Kendall Square. He was walking to lunch in the square yesterday with another former Lotus legend, Bob Frankston, when an unusual sight stopped them in their tracks. As Sturtevant described it: “a hawk eating a pigeon in the middle of the sidewalk while about a dozen people stood around and watched. Bob had his camera and took this pic.”

Frankston is an Internet pioneer who, along with Dan Bricklin, co-founded Software Arts, where he implemented VisiCalc. In 1986, he joined Lotus Development and went on to create Lotus Express. Sturtevant, whom we most recently wrote about a couple days ago, was brought into the Lotus fold around the same time and worked on LotusNotes, among other things. Before joining Microsoft in September, he most recently worked at Eons, IdeaLab, and Refer. You can find a litany of the companies Sturtevant has been involved with here.

But the important part—what caption to put on the picture? Frankston’s suggestions:

—Early Exit

—Typical VC Lunch in Cambridge Center

—Who says East Coast investors are wimps?

Feel free to chime in with your own suggestions by adding a comment below. Who knows, there could be a prize for our favorite one…

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Reed Sturtevant is building a Microsoft development lab and innovation group here in Cambridge, but I caught up with him in Redmond, WA. I gather the former Eons chief technology officer and local tech legend has logged a lot of miles between Seattle and Boston since being plucked away from Eons in late September. And, in fact, one of his chief occupations—in some ways taking precedence over building the lab—has been learning about his new employer. “What I’ve been up to is really a crash course in Microsoft itself,” he told me in a telephone call yesterday.

We broke the news of Sturtevant’s move to Microsoft shortly before he started work on September 24, reporting that he had been hired to open the lab next door to the MIT campus, not far from the Kendall Square offices of a Google lab that has also been expanding fast this year. And now, with some two months under his belt, we thought it was a good time for an update.

“It’s been fun,” Sturtevant says. “Not a whole lot to show for it in terms of building out the team, or this group, if you will.” But he has made a lot of progress behind the scenes—and reports that he is getting set to make the first hires, and that a core team should be in place by year’s end. “I have a number of folks that I’m talking to for certain positions, inside Microsoft [and] outside Microsoft,” he says.

Sturtevant is currently occupying a corner of the first floor at One Memorial Drive in Cambridge, a 17-story luxury office tower overlooking the Charles River. Microsoft recently leased about half of the building, and the same week Sturtevant started work, employees of the company’s SoftGrid unit (the new name for Softricity, a Boston firm acquired last year) also moved into space on the building’s first two floors. Sturtevant reports that once his group is in place—he declined to disclose its intended size right now, noting “I need to be stealth about that”—it will set up shop on the 10th or 11th floor.

It still hasn’t been determined what, exactly, the lab will work on. “It’s a new development group, and we’re really going to work out the details as we get started,” he told me in September. “At this point it’s wide open. So all I’ll say is the intention is to try new ways to innovate and bring some fun products to market.”

Microsoft has three large business divisions. Sturtevant’s lab will not belong to any of them, nor will it be part of the large Microsoft Research organization. Instead, it will serve as an arm of chief software architect Ray Ozzie’s group, which is focused on special innovation projects. It was New Englander Ozzie and his brother, Jack (who also works at Microsoft), who personally recruited Sturtevant, whom they’ve known since their days at Lotus together in the 1980s.

Sturtevant has been meeting with people from around Microsoft to get ideas for what to work on—and says that there’s been a “hugely positive reception to the idea of having a footprint in Boston.” (Google evidently feels the same way: as Wade reports today, the search giant is staffing up its Cambridge operation quickly and will soon take over a space at Five Cambridge Center that’s three times as large as its current office at One Broadway.)

Microsoft’s new Boston tech guru also says that not everyone who works with him will actually be a part of his lab. He’s been meeting with folks from the advanced development arms of the various business divisions, and at least some think they will hire people who live in Boston to work directly for them. Sturtevant says a fair number of senior technical people work remotely from other areas, and that offering a physical space for them here could be a means of attracting talent in the Boston area—or retaining Microsoft people who need to move east for personal reasons.

Having representatives of the product groups in Cambridge might also facilitate transfer of technology from Sturtevant’s group to the business divisions. “The expectation is that successful projects that get traction, as they grow will find a home inside one of the existing business groups,” Sturtevant says.

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Microsoft has hired Eons chief technology officer and local software legend Reed Sturtevant to head a new development lab and innovation group that is expected to set up shop next door to the MIT campus.

“That’s true,” said Sturtevant when I asked him about the lab in a telephone conversation this evening. “It’s starting Monday with me.” Sturtevant says he was personally recruited by Microsoft chief software architect Ray Ozzie and Ozzie’s brother Jack, who also works at Microsoft. He’s known both since their days at Lotus together in the 1980s.

I’d been hearing rumors about Sturtevant’s planned move for a few days now, in bits and pieces. Sturtevant, who helped launch Lotus’s first Internet products and served as the Boston face of famed dot-com incubator Idealab (in addition to launching several of his own entrepreneurial endeavors), says that even he doesn’t know many of the specifics of the Microsoft gig yet. “It’s a new development group, and we’re really going to work out the details as we get started,” he says. “At this point it’s wide open. So all I’ll say is the intention is to try new ways to innovate and bring some fun products to market.”

The lab is eventually expected to take root at One Memorial Drive in Cambridge, a 17-story luxury office tower overlooking the Charles River. Microsoft has recently leased about half of the building. Employees in the company’s SoftGrid unit (the new name for Softricity, a Boston company acquired last year) plan to move into about a quarter of that space this week.

Sturtevant says it will be a while before his group sets up shop there, though. “At least in the beginning my plan is to be a little bit mobile,” he says. “I’ll probably spend a bunch of time out in Redmond.” That way, Sturtevant says, he can consult directly with Microsoft colleagues, most notably Ray and Jack Ozzie. “Ray has been my main contact out there, but I will be reporting to Jack,” Sturtevant says.

Sturtevant’s move to Microsoft will likely be seen as a further blow to Boston-based Eons, an Internet site for people over 50, which recently laid off a third of its staff. It also could signal the opening of yet another front in the Microsoft-Google wars. Earlier this year, Google launched its own research and development lab in Cambridge, just a few blocks away from the new Microsoft space in Kendall Square. A team there led by another local software legend, Rich Miner, may be working on the long-rumored Google mobile phone, according to a report several weeks ago in the Boston Globe.

The hiring of Sturtevant seems to be one piece of an ambitious plan for Microsoft’s Boston-area R&D expansion spearheaded by Ray Ozzie, who joined Microsoft in 2005, when the software titan bought his Beverly, MA-based company Groove Networks. The pace of our [R&D] growth has really picked up in the last couple of years,” Ted MacLean, Microsoft’s general manager for New England, told me in an interview last week. “It was underway before Ray got here…now we’ve got a chief Boston cheerleader in Seattle.”

Beyond Ozzie’s knowledge of the area and his belief in its potential, MacLean says there are several other reasons for the Boston R&D expansion. For starters, largely through acquisitions, Microsoft’s workforce in the area has gone from just shy of 200 employees two years ago to close to 600 today. In addition to Groove and Softricity, the company bought Desktop Standard of New Hampshire last year. “In the past we’d pick up those resources and assets and ship them to Redmond,” he says. “We’ve made a change in strategy to keep them here and continue to develop their products here.” That requires boosting R&D.

MacLean says that by expanding the number of R&D jobs in the Boston area, Microsoft also stands a better chance of retaining and attracting employees here, largely because it can offer a wider range of career opportunities in the area. “As you think about Massachusetts as a center of innovation, it’s important that there are jobs there, well paying jobs,” he says.

One Memorial Drive in Cambridge is destined to be the hub of a lot of this expansion. Microsoft has leased enough space to house up to 320 people, more than half its current workforce. “The number one attribute of that location that we want to be able to take advantage of is proximity to schools—principally MIT, but others as well,” MacLean says.

To pull off its ambitious plans, Microsoft will need a handful of well-known and respected leaders to manage R&D efforts, help attract talent, and build ties to the academic community. In that regard, Sturtevant seems a perfect choice. According to his Eons bio, he has been responsible for all of that company’s technology platform. Before joining Eons, Sturtevant served as managing director and VP of technology for Idealab, a prolific startup incubator founded in 1996 by entrepreneur and Caltech grad Bill Gross that in the heart of the dot-com boom times was launching a company a month. While still at Idealab, he became the founding CTO of several Idealab spinoffs, including Refer.com, Compete, Picasa, and Paythrough, and was also founding CEO of Newbury Networks, Pathspace, and Newbury Payments.

Chief Correspondent Wade Roush has assembled a detailed review of Sturtevant’s employment history.

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If anyone can bring a startup sensibility to a software giant like Microsoft, it’s Reed Sturtevant. The MIT dropout, who left his position as CTO at over-50 social networking site Eons on Friday to spearhead a new Cambridge-based development team for Microsoft, has been CEO or CTO of at least eleven technology startups. Some of those companies are thriving today, while others have gone the way of the sock puppet, as the following roughly reverse-chronological rundown of companies where he has worked illustrates.

Eons

Sturtevant is credited as the main technological guru behind this Boston startup, which runs a social networking site for people over 50. Members can create MySpace-style profiles that include biographies, blogs, photos, and friends lists; search for new friends; join discussion groups, learn about longevity-extending techniques, and play “brain-building” games. The venture-backed company laid off a third of its staff on September 10 and is reported to be refocusing on its social networking services while dropping costly features such as obituaries.

Idealab

This famous Pasadena-based startup incubator, founded in 1996 by entrepreneur and Caltech grad Bill Gross, launched dozens of companies during the dot-com boom years of 1998-2000. Its most famous spinoff was Goto.com (later named Overture), which invented contextual advertising for search engines, the foundation of Google’s fortunes. Idealab was hit hard by the dot com crash; eToys, eMachines, Z.com, and Utility.com were among its spectacular flameouts. The company “withered to a handful of employees,” to quote a 2002 Wired article, and refocused on industries with a high barrier to entry. But it’s still around today, still churning out startups.

Sturtevant was a managing director in charge of the product development team at Idealab’s Boston office, which opened in late 1999 at 181 Newbury Street, the former First Spiritual Temple and former location of Waterstone’s bookstore. The office, which was home to both Newbury Networks and Compete (see below), closed in May 2003. Idealab’s current Boston office is at 745 Boylston.

Refer

This Idealab spinoff, headquartered in Boston, peaked at 35 employees in 2000 and shut down in 2001. It was a fee-based job posting site where people could earn referral bonuses of $1,000 or more if they referred someone who ended up getting a job through the site. Sturtevant was founding CTO.

Compete

Based at Copley Place, Boston, Compete is a Bill Gross creation that offers a toolbar consumers can add to their Web browsers. For each site a user visits, the toolbar informs them about the site’s popularity and trustworthiness, as well as money-saving deals such as promotions and coupons. Data from user’s clickstreams powers the company’s search analytics and site analytics services, which it sells to other companies. Sturtevant was founding CTO.

Picasa

This Idealab company, where Sturtevant was CTO, was founded by Lars Perkins to commercialize PC and Web applications for editing, organizing, and displaying digital photos. Google acquired Picasa directly from Idealab in 2004. The latest version of the Picasa software, Picasa 2, is free and competes with Adobe Photoshop Elements and Microsoft Digital Image Suite (which both cost about $100).

Paythrough

This short-lived Idealab spinoff handled micropayments for Web-based content. The entire staff was laid off in 2002. Sturtevant was founding CTO.

Newbury Networks

Based in Boston, Newbury Networks sells software for tracking office assets tagged with wireless devices. The company’s graphical interface can show the location of a tagged machine or other piece of equipment on a floor map. Sturtevant was founding CEO.

Pathspace

Little information is available about Pathspace. In a 2003 article about the shutdown of the Newbury Street offices of Idealab, the Boston Globe called it a “stealth-mode Internet startup working on location tracking technology.” Sturtevant was founding CEO.

Newbury Payments

This Idealab spinoff, also now defunct, was created to develop an online payment system featuring prepaid accounts that consumers would fill up by buying retail gift cards. The system was targeted at consumers without credit cards or PayPal accounts. Sturtevant was founding CEO.

Radio AMP

The company, formed in the spring of 1999, also went by the name “Radioactive Media Partners.” It planned to offer ready-made, personalizable audio programming that Web users could launch from the pages of major Web portals. It was a promising time for such ventures, as Yahoo had just purchased Broadcast.com for $5.7 billion and AOL had purchased Spinner for $400 million. Part of the company’s funding came from Boston’s OneLiberty Ventures. Sturtevant was co-founder and CTO.

Radnet

Radnet made software called WebShare that helped developers build groupware applications for use with Microsoft BackOffice and Netscape SuiteSpot (both long gone). Sturtevant told the Wall Street Journal that this company “tried to compete with Lotus Notes in Internet-based collaboration software but found that difficult and switched to software for Web portals.”

Lotus

While working at a company called Graphic Communications, Sturtevant created a PC graphics and presentation software package called Freelance Graphics. After Lotus bought the firm in 1986, Sturtevant became a product development manager in the company’s Graphics Products Group. In 1991 he joined the team working on Lotus Notes and InterNotes—Lotus’s first Internet product, which became part of the Lotus Domino Server. Sturtevant remained at Lotus until 1995.

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