
FUSE actually stands for Future Social Experiences, and the Web is abuzz with varying interpretations of what the reorganization, and Chief Software Architect Ray Ozzie's vaguely worded internal announcement, actually means for Microsoft going forward.
The FUSE Mission
Ozzie, the driving force behind Microsoft's increasing interoperability with open source, described the rational behind FUSE in an internal memo:
"the three groups being combined have concrete skills and code in areas where 'social' meets sharing; where 'social' meets real-time; where 'social' meets media; where 'social' meets search; where 'social' meets the cloud plus three screens and a world of devices,"
according the Seattle P.I. Microsoft blog.
What's Really Going On
But what does the reorganization, and this sudden focus on all things 'social' mean?
Reports on the Web have jumped to a number of conclusions such as, Microsoft is scaling back Live Labs-style R&D in tough economic times, or that the company will enter the Facebook/MySpace fray.
What seems more likely, is that they simply see a need for a collaborative approach to integrating social networking concepts.
FUSE Labs could be an attempt by Microsoft to integrate collaborative technology throughout their range of products, along the lines of Salsa, a project previously headed by Cheng, which combined email and social networking concepts, or Townsquare, an enterprise news feed solution that CMSWire reported on a while back.
Strong Leadership
The prospect of Cheng heading up such an effort for Microsoft is exciting. As head of the company's Creative Systems Group and as part of Microsoft Research efforts, Cheng has proved that she takes projects from development to implementation.

General Manager Lili Cheng
Wallop, which implements a unique set of algorithms to automatically build networks based on social interaction, is one such project. Her work on Wallop and Vchat has resulted in a number of social networking patents for the Redmond-based firm.
With Cheng at the helm, and the company's recent outreach to Facebook and rumored talks with Twitter, big things may well be coming down the pipe.