Yesterday, based on sources, BoomTown reported, that Yahoo search exec Sean Suchter was headed to Microsoft.

Now it’s official. Here’s a Microsoft (MSFT) statement on the hiring of Suchter (pictured here), an important tech leader at Yahoo (YHOO), from Satya Nadella, SVP for Search, Portal and Advertising:

“We are very pleased to confirm that Sean Suchter will be joining Microsoft as the GM of our Silicon Valley Search Technology Center, working on Live Search. Sean will report into Harry Shum when he starts work on December 22. We look forward to welcoming him to Microsoft at that time.”

The talent grab from Yahoo is an interesting one, given that Microsoft has also tried to to buy Yahoo’s search and search ad business many times, to little success.

Microsoft CEO Steve Ballmer reiterated that desire yesterday at the software giant’s annual meeting, although he discounted the possibility that Microsoft would rebid for all of Yahoo after it abandoned a takeover attempt earlier this year.

His statement sent Yahoo’s stock further into the basement.

Losing important execs like Suchter, who was the VP of Search Technology at Yahoo, will also not help the company’s prospects. Suchter was deeply involved in Yahoo’s efforts to open up its search platform, initiatives the company has touted aggressively as a bright spot in its not-so-lustrous landscape.

Suchter–who came to Yahoo almost six years ago after it acquired Inktomi (the company that got Yahoo into the search business) in early 2003–has been talking with Microsoft for a while and his leaving was not linked to this week’s announcement that Yahoo CEO Jerry Yang will be stepping down.

But it could be linked to the possibility that another former major Yahoo search exec could also be going to Microsoft. I wrote a post earlier today that I thought the Ballmer was looking at Qi Lu–the well-regarded Search and Advertising Technology group EVP at Yahoo, who left earlier this year–to be its digital head.

All this muscling up in search by Microsoft is troubling for Yahoo. There are big questions, now that Yang is stepping down, whether Yahoo will stay in the search business or sell it off. Yang has been a big proponent of doubling down in search, considering it integral to the entire Yahoo ecosystem.

But others make the very persuasive argument that Yahoo will be increasingly outspent by both Google (GOOG) and Microsoft, in what is turning into a very vicious and expensive arms race.

If it sold off its No. 2 search business to Microsoft–ironically, Yahoo used to deliver Microsoft’s search results–many think it could have huge costs savings and garner guaranteed revenues.

News of Suchter’s departure from Yahoo, including the internal memo announcing it, appeared in Valleywag yesterday.

Please see this disclosure related to me and Google.

Yahoo–which has stuck to its guns by staying in the search business, even though many think it is a losing game and should be sold off to Microsoft–has lost a key engineer in that arena to, uh-oh, Microsoft.

Sean Suchter, the VP of Search Technology at Yahoo, was also deeply involved in Yahoo’s efforts to open up its search platform, initiatives the company has touted aggressively as a bright spot in its not-so-lustrous landscape.

The departure of Suchter–who came to Yahoo (YHOO) almost six years ago after it acquired Inktomi (the company that got Yahoo into the search business) in early 2003–has been in the works for a while and was not linked to this week’s announcement that Yahoo CEO Jerry Yang will be stepping down.

Yahoo confirmed Suchter’s departure, but Microsoft (MSFT) has not yet announced his arrival there.

[UPDATED: Microsoft has now officially announced that Suchter is coming to the company.]

But sources said it will be in late December, with Suchter will be working in search for Satya Nadella, the SVP who heads engineering for Microsoft’s search, portal and advertising platform group.

Sources at Microsoft had told me of that they were close to locking down this impressive get several weeks ago. “If we can get someone like Sean, it says a lot,” said one source.

Indeed, Suchter has been an important tech leader at Yahoo, much as Qi Lu–the well-regarded Search and Advertising Technology group EVP, who left earlier this year–was.

In his LinkedIn profile, Suchter noted about his duties at Yahoo:

“I run Yahoo’s Web search engine, with overall responsibility for its success. This includes engineering, product responsibility, operational stability, results quality, capex spending and revenue (from the paid inclusion program).”

There are big questions, now that Yang is stepping down, whether Yahoo will stay in the search business or sell it off. Yang has been a big proponent of doubling down in search, considering it integral to the entire Yahoo ecosystem.

But others make the very persuasive argument that Yahoo will be increasingly outspent by both Google (GOOG) and Microsoft, in what is turning into a very vicious and expensive arms race.

If it sold off its No. 2 search business to Microsoft–ironically, Yahoo used to deliver Microsoft’s search results–many think it could have huge costs savings and garner guaranteed revenues.

News of Suchter’s departure, including the internal Yahoo memo announcing it, appeared in Valleywag this morning, which speculated that Suchter was headed to Microsoft.

In the memo, Tuoc Luong, Yahoo’s SVP of Search, stated the very obvious about Suchter’s departure:

“Unfortunately, I have to give some bad news to you. Sean Suchter has resigned. Sean’s last day will be December 19th.

Some of you will find this news shocking given that Sean has been a Gibraltar rock at Yahoo and in particular for the Search team. I understand this.”

Interestingly, Yahoo has recently nabbed several of former Microsoft execs, including U.S. ad head Joanne Bradford and U.S. Audience SVP Jeff Dossett.

Please see this disclosure related to me and Google.

[Photo from Flickr stream of WebProNews.]

“Search is no longer the dominant paradigm,” Bhat told attendees of the Next Web conference in Amsterdam. “The future of the Web is about personalization. Where search was dominant, now the Web is about ‘me.’ It’s about weaving the Web together in a way that is smart and personalized for the user.”

Search no longer the dominant paradigm? Damn. Too bad the company spent so much money on All The Web and Alta Vista (part of the Overture Services acquisition). And Inktomi. And Alibaba and … I’m kidding, of course. Clearly, Yahoo’s not conceding here. It’s just shifting the playing field a bit, as Bhat himself later noted: “We’re not admitting defeat,” he told the London Times Online. “Search still matters, but we need to be providing a wrapper around search to turn the info-search offers up into something more useful.”

So no, Yahoo’s not fleeing into the woods, its exclamation point flopping wildly about in the wind. It’s just trying harder–you know, like Avis Rent a Car. And to be fair, Bhat’s comments echo some things we’ve been hearing from Google’s leadership lately as well. Asked recently how Google might look in five years’ time, CEO Eric Schmidt said: “We are very early in the total information we have within Google. The algorithms will get better and we will get better at personalization. The goal is to enable Google users to be able to ask the question such as ‘What shall I do tomorrow?’ and ‘What job shall I take?’?”

UPDATE: Yahoo, which claims Bhat was misquoted in the UK Times report on which this post is based, issued the following statement on its commitment to search.

Web search is a top priority for Yahoo! and we are committed to developing and investing in new technologies that will shape the future of search. We believe personalization tools complement our efforts in search and will play an important role in delivering the most relevant information to help consumers get a more complete answer.”