A few years back, Microsoft was frequently in the spotlight for all the top talent leaving the company, as exemplified by a high-profile legal battle over executive Kai-Fu Lee’s decision to leave the Redmond company for Google in 2005. But nowadays, the company is more likely to be in the news for poaching executives and engineers from its rivals — and particularly from Yahoo.

The latest example is today’s news that Yahoo vice president Kevin Timmons is joining Microsoft to head up its data-center services team. As illustrated in the chart above, he’s the latest in a series of former Yahoo executives to join the Redmond company since Microsoft failed in its bid to acquire Yahoo last year.

Those are just the ones that have been publicly reported. Microsoft CEO Steve Ballmer said in March that the company had hired about 10 key technologists from Yahoo.

Of course, the revolving door spins both ways. For example, Mike Manos, general manager of the company’s data center unit, left the company in April for Digital Realty Trust, creating the leadership gap that Timmons has now filled. Yahoo has also managed to land some former Microsoft executives itself. And James Whittaker, a respected software testing expert, left Microsoft for Google earlier this month.

But that pales in comparison to the number of defections from Microsoft to Google in the Seattle region a few years ago.

And overall, it appears that Microsoft has been more than holding its own in the battle for talent over the past year, particularly in the online arena. The question now is whether the company can successfully leverage all those hires to significantly improve its market position in Internet search, cloud computing and other key Internet markets.

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and Paul Allen-backed Xiant looks to help manage email overload  

Paul Allen must be sick and tired of wading through email. First, the Microsoft co-founder incubated Gist, a Seattle startup that’s trying to help people more effectively manage and consolidate personal messages flowing through Twitter, Facebook and email.

Now, the billionaire is launching Xiant, an add-on to Microsoft Outlook which is designed to help people better organize email messages.  In fact, Xiant — a unit of Vulcan Technologies — was a direct outgrowth of Allen’s frustration trying to keep up with email.

“Xiant Filer started as a personal project to help Paul keep up with heavy eâ?mail traffic," said Chris Purcell, vice president of Vulcan Technologies in a release.  "It worked so well we all started using it, which led us to take it to market.”

Other companies are trying to attack this arena as well, making people more productive as they spend an increasing amount of time organizing projects via email. The two offerings that most readily come to mind are Gist and Xobni, with 3-year-old Xobni being the most obvious competitor.

I asked Vulcan spokesman David Postman what the differences are between Gist and Xiant, since both are backed by Allen. Here’s what he said:

"It is an add-on and it will allow you to single click to file e-mails into files and it will learn your filing preferences and offer you suggestions on where to file mail," said Postman, who has been using it to sort his personal emails. "You could combine it with Gist for a real powerful tool, but Xiant Filer is a thing you can add and then never have to worry about it again."

So, what’s interesting here is that Gist and Xiant could team up to take on Xobni — the early entrant in the space which raised $7 million in funding earlier this year from Khosla Ventures, First Round Capital, Baseline Ventures and others. I have a call into the Xobni folks to get their reaction on things.

The Xiant product, which is free during the trial period, will go on sale in the next 60 days.

Vulcan also is touting Xiant as a return to the software business for Allen, noting in the release that this is one of his first serious forays into the market since leaving Microsoft in 1983. 

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and Targeted Genetics cuts deep  

Troubled Seattle biotechnology firm Targeted Genetics said it is cutting its staff by more than two-thirds to help keep the company running into August.

The company said in a press release it will reduce its head count to 10 to 15 employees by the end of July. The company currently has 46 employees, Targeted Genetics spokeswoman Stacie Byars told The Puget Sound Business Journal.

The biotech firm said it has also “continued to pursue a settlement of its Bothell lease obligations and has also entered into discussions to reduce or eliminate its other facility costs.”

Targeted Genetics has been running low on cash for month. At the end of March, it reported just $3.9 million in cash on the books. It noted in the press release:

The Company continues to pursue additional capital through strategic transactions, licensing or selling technology, product development collaborations, and sales of stock. If the Company is not successful in raising additional funding sufficient to support ongoing operations, it will wind down its business or otherwise cease its operations.

Targeted Genetics also said today that its primary collaborator — the University College London/Moorfields Eye Hospital — has continued clinical trials for Leber’s Congenital Amaurosis (an inherited disease that often results in blindness).

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AdReady inks self-service online display ad deal with Yahoo  

Eight months ago when Google announced its new self-service online display advertising system, AdReady Chief Executive Aaron Finn noted at the time that he felt proud, nervous and motivated that the search giant was copying his Seattle company’s offering.

Now, the battle is escalating even more. AdReady today unveiled a significant partnership to power Yahoo’s new My Display Ads offering — a pilot program designed to help small and medium-sized businesses easily create, monitor and distribute display ads through Yahoo.

AdReady and Yahoo have been working together for some time. I first got word of a partnership last June, and at the time speculated that the Seattle upstart could be an attractive acquisition candidate for Yahoo. (Perhaps even more so now given that Yahoo has publicly said in recent weeks that it will be going on the acquisition path).

Backed with $12 million from Madrona Venture Group, Bain Capital, Khosla Ventures and others, AdReady’s goal is to help online publishers and media companies grab some of the local advertisers (car dealers, dentists, retailers, etc.) who might not be accustomed  to running display ads online.

Local advertisers choose from ad templates on AdReady, then use the tool to distribute the messages to targeted demographic groups in certain geographies. The AdReady tool — used by The New York Times, MSNBC and others — also allows clients to track what advertisements are working best. 

It will be interesting to see how this battle unfolds. Google has decided to build its own product. Yahoo — which has made display advertising a cornerstone of its strategy — is partnering with AdReady. 

And then there’s still another big player eyeing this space: Microsoft. 

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