Updated 3 p.m. PT, with comments from Gary Flake.
Microsoft has decided to pare down its 3-year-old Live Labs effort, splitting the research-and-development team into different parts of Microsoft's online efforts.
The group was launched to some fanfare three years ago, with Gary Flake hired from Yahoo to lead the effort.
Flake will remain head of the group, which will have roughly half as many people and will now focus more narrowly on search and Web experiences, such as deep zoom, and other navigational and organizational approaches. Other folks will be shifted to Microsoft's mobile or online-services units, but the company is not laying off anyone as a result of the shift, according to Microsoft spokeswoman Stacy Drake.
"Several teams are transferring directly to product teams that are in need of Live Labs' talents to accelerate existing projects," Drake said. The effort was announced to Microsoft workers on Monday.
Drake said the economy did play a factor in Microsoft's shift.
"It had a role," Drake said.
Apparently, the Microsoft sandbox was a little too big, given the current economic environment.
Several interesting projects lived in the unit, including PhotoSynth and SeaDragon, as well as lesser-known ventures like Listas, a list-sharing service, and Thumbtack, a sort of clipboard for the Web.
In an e-mail interview, Flake said that the changes will allow the group to things at a bigger scale.
"We've always done many small things, but in this climate we thought that it made more sense to focus on the bigger ideas and bigger bets," Flake said. "Over the next year, you'll see us launch the most ambitious projects we've ever done."
When he launched the project, Flake said his goal with Live Labs was to help Microsoft develop software faster.
"Historically, the software industry has been an industry in which it was fine to have months or years in between product cycles," Flake said. "That is something that has been part of Microsoft's processes as well."
The splitting up of the Live Labs team was first noted by PaidContent.org