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Microsoft may be in a hurry to acquire Yahoo's advertising revenue, but it won't rush to merge its computing systems with Yahoo's after a potential merger, according to a top executive.

Ray Ozzie, Microsoft's chief software architect, told the Financial Times that the company would take a long, hard look before attempting any integration of technologies.

"Technology companies, if they dive in and just smash things together for smashing-them-together's sake, it's reckless, it's just simply reckless," Ozzie told the FT in a story published on Sunday.

At last week's Mix '08 conference in Las Vegas, Ozzie talked about Microsoft's efforts to build a "seamless mesh" computing infrastructure that will be more aware of mobile devices and online applications.

As our own Dan Farber put it last week, reporting from Ozzie's Mix keynote: "Ultimately, the 'mesh' requires an overhaul of the back end to support utility computing on a grand scale. In addition, applications need to be 'refactored,' Ozzie said."

That refactoring may need to extend to a range of open source-based applications within Yahoo that Microsoft will need to tackle before it can fully realize the benefits of any merger.

Ozzie may have made an oblique reference to that challenge in his Mix keynote: "And then there's Yahoo...I can say it's already added some interesting twists to what promises to be a really, really exciting year," he said.

Microsoft may have already begun to help itself in this integration challenge. Last month, the company launched a broad interoperability strategy to better link to open-source software and other non-Microsoft technologies.

News.com's Stephen Shankland underlined the significance of that move, in light of the Yahoo bid. "The third, and perhaps strongest reason, is that open-source software has become a powerful force in the software industry and customer sites--and even at Yahoo, the Internet company Microsoft is trying to acquire for $44.6 billion in part because of its engineering expertise."

Last week, Microsoft CEO Steve Ballmer said that the company would likely keep some of the open-source PHP applications that Yahoo relies on for its services and attempt to mix-and-match them with Microsoft's platforms. "We should not have two of everything. We'll have to sort some of that through," he said.

Fortune had the best headline in the a.m. to describe the latest Redmond reversal: Glasnost at Microsoft.

Catchy, but was it entirely accurate? More about that in a moment. Briefly put, Microsoft promised to ensure interoperability with competitors' offerings by publishing technical information about its own technology. At the same time, Microsoft said developers will no longer need to obtain a license or pay royalties.

For a deeper dive, here's the URL to our special coverage. Also, Erick Schonfeld over at Techcrunch had a post worth checking out.

The pledge triggered the predictable avalanche of press coverage. On the surface, at least, this amounts to a volte-face when you consider Microsoft's pugnacious history. So why did Microsoft conclude that it made sense to try and get along with everybody else in the big tech sandbox that is Silicon Valley?

As I read through Microsoft's Interoperability Principles, I was struck by a couple of things.

First, Ray Ozzie's fingerprints are all over this document. The Wizard of Oz, Microsoft's chief software architect, may be among the savviest technologists alive today, and it's been interesting to watch him navigate a huge, resistant bureaucracy. Since Ozzie's arrival after Microsoft acquired his company in April 2005, he's attempted with limited success to engineer a revolution from within.

In terms of vibe, at least, Ozzie has a keener appreciation of what developers and customers need than do the old hands at Microsoft. They talk the talk but still bring along a lot of baggage to any discussion about openness or interoperability. And for too long, the Microserfs' MO was kill, crush, destroy--and then issue a press release explaining why the targeted hit du jour was a good thing for all concerned.

Maybe it's because Ozzie is at heart the developer, par excellence, that he's pushed for a more pragmatic way to satisfy customer demands. He understands that the trend in software development is toward more composite applications. That is, programs built with feeds or the ability to be built using other apps. Along with data portability, these attributes now appear near the top of user wish lists.

Unfortunately for Microsoft, the company's bureaucracy has been slow to grasp that, horror of horrors, customers actually may want to take data from an Excel spreadsheet and pump the information into Google Maps. But from Ozzie's perspective, Thursday's announcement was a no-brainer. Enterprise customers get something they crave. As for developers, they receive needed help because this is where the software industry is heading--with or without Microsoft.

Ozzie was once described to me as a technology optimist. While Ballmer, with his more global corporate-wide responsibilities, may focus on the risks of a step like this from a business perspective, Ozzie can play the role of house technology advocate, pointing out the new opportunities by making it easier for X to talk to Y. It's just that simple. The only question is why wouldn't Microsoft do it?

This may be the easy part. Microsoft also wanted to send a message to European regulators that it's a good corporate citizen. Judging from the European Union's initial reaction, Ballmer and Ozzie will be racking up frequent flyer points to sell Neelie Kroes, the EU's competition commissioner.

In a statement, the EU sniffed that while it would welcome any move toward "genuine interoperability," Microsoft has issued four other similar statements in the past. Not a gushing first reaction. Then again, consider the rancid history between Microsoft and the EU. It was only in October that Microsoft finally agreed to comply with elements of the European Commission's 2004 antitrust order that it had earlier termed entirely objectionable. But maybe old rivals indeed will decide to let glasnost inform their relationship, "going forward," as the MBAs are wont to say these days.

However the news finally gets interpreted across the pond, I wouldn't dismiss Ballmer's description of Thursday's news as "an important change." For once, he wasn't letting hyperbole get too ahead of the reality.

Microsoft Chief Software Architect Ray Ozzie provided a fresh take of the technical components at the heart of its online services push on Thursday.

Speaking at the Microsoft Financial Analysts Day, Ozzie spelled out in greatest detail yet the work he has led on "cloud" Internet services.

During the next 12 to 18 months, Microsoft will introduce software and hosted services designed to enhance its current product line and derive more revenue from advertising-supported Web services, Ozzie said.

Echoing comments he made in an interview with CNET News.com earlier this year, he said Microsoft is preparing a multi-layered platform designed to build and run Web-based services or on-premise software coupled with services.

This platform will be made available to all its customers, including business partners, consumers, business customers and software developers. It is part of the wider industry shift from software to software plus services, he said.

"We are the only company with a platform DNA to viably delivery this kind of highly leveraged platform approach to services and we're certainly one of the few companies that has the financial capacity to capitalize on this sea change" he said.

At the foundation of Microsoft's services architecture is what Ozzie called Global Foundation Services, the managed computing gear at Microsoft data centers for running Internet applications.

Next he referred to Cloud Infrastructure Services, the software tuned for utility computing, where outsiders can purchase computing resources as needed.

Cloud Infrastructure Services is "a utility computing fabric on which online services run. It has an efficient, virtualized computing layer application framework that supports different application models for horizontal scaling, the infrastructure for automatic deployment of services" along with storage of different types of data, Ozzie said. It will also have network services software for serving up information to people over the Internet.

Live Platform Services, the next layer, is a set of largely consumer-oriented services, such as verifying a person's user name and password, social-networking services, and other communications-oriented tools. Microsoft's AdCenter ad-service software will be part of this suite of services.

Ozzie said Microsoft is designing this infrastructure so that consumers can access online services from a range of devices, including its Xbox gaming device, PCs, its Zune digital music player, and phones.

Microsoft can also analyze consumer online behavior coming from its data center for more targeted advertising, he added.

For business customers, Microsoft's strategy is to offer enterprises a choice of either on-premise software, Microsoft-hosted services such as outsourced e-mail, or hosted services from Microsoft partners.

Corporations could contract with Microsoft for utility computing-like services, where they would essentially rent computing power or storage capacity to meet anticipated spikes in demand, Ozzie said.

Ozzie stayed clear of making specific product announcements except to say that his goal is to encourage every software developer at Microsoft to add an online services components to all its products.

"The biggest services opportunity is a services relationship to our classic software products," he said.