Update: Microsoft has confirmed Lu’s appointment in an official release. Lu will start January 5, and report directly to CEO Steve Ballmer. He will oversee a trio of execs—but not all of the names initially thought: Nadella, Mehdi and Scott Howe, who has been promoted to SVP of MSFT’s Advertiser & Publisher Solutions group. Former aQuantive CEO Brian McAndrews previously held that title, but he’ll be transitioning out—and leaving MSFT—over the next several months.

Microsoft’s quest to find a digital head will end in a rather technical choice: former Yahoo EVP of engineering for Search and Ad Tech Qi Lu, according to Kara. The final details of his contract are being ironed out, and could be announced by next week, the story says. This position has been vacant since Kevin Johnson left and joined Juniper.

The logic for hiring Lu: since a lot of Microsoft’s future rests on winning in the search and search ad space and catching up with *Google* and Yahoo, Lu is also well suited for the position. But it is still a curious choice, as Lu lacks the business acumen to drive MSFT out of its digital/online troubles. As a result, he could be paired with another senior MSFT business exec, and that’s still being decided. He will be overseeing three major egos at MSFT: Satya Nadella, Yusuf Mehdi, and Brian McAndrews. McAndrews was thought to be a front runner to run the merged Yahoo-MSN group if MSFT was successful in buying Yahoo, earlier this year. Likely McAndrews could be that business partner to work with Lu, the story speculates.

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