Nah, they’re not spinning out a newco with Yahoo, but it’s a start. According to LiveSide:
Microsoft today announced the creation of a new group spun out of Windows Live, the Live Search and Ad Platform. Live Search (formerly Windows Live Search, formerly MSN Search) will join adCenter in a new group that will not report to Steven Sinofsky and Windows Live, but will be headed by Satya Nadella, and report directly to Kevin Johnson, the Platform and Systems division head.
Microsoft has a long road ahead (snicker) with search and search related products. I think that dropping the Windows and MSN brands, as painful as it may be for MSFT, is a step in the right direction. Personally, I think of my online experience as being separate from my off-line work. They overlap, and they will continue to merge, however, my online work is not defined by my laptop. Consider Mac users; I bet that for many their cult like devotion make them feel repulsed by the Windows moniker. The other thing MSFT needs to do is to quit worrying about clever artistic interfaces and get usable products out. Yes, dress sharp, but enough with trying to outdo Cirque du Soleil.