Microsoft on Monday announced that it has hired former Google director of Google strategic technologies Preston McAfee as its first Chief Economist. He will report directly to executive vice president Harry Shum and lead a team of economists who will work closely with CFO Amy Hood.

"Preston is a world-class researcher in micro-economics and marketplace design who brings to Microsoft a unique blend of research depth combined with real-world applicability," says Stanford economics professor and Microsoft advisor Susan Athey. "His past work has brought together economics, computer science, and engineering to create innovative solutions for problems such as the design of efficient auctions for telecommunications spectrum and display advertising. He's also interested in applying economics and machine learning to inventing and building new tools that improve business operations and create value customers, so he brings a great skill set for the breadth of Microsoft's products."

In addition to his previous work at Google, McAfee also served as chief economist at Yahoo from 2007 to 2012.

According to Shum, Mr. McAfee will work with Ms. Hood and business and engineering groups across the company to develop new business models and metrics, design marketplaces for advertising and apps, assist with government relations and policy, and develop an economic strategy for the company. His hiring follows a call to action from new CEO Satya Nadella for the company to aggressively explore new strategies to create greater value from its product/service "data exhaust."

"Our industry is barely a hundred years old, and we're certainly entering a new, more human era of computing where our technology and the companies that provide it will work more under the user's control and at the user's command," Mr.Shum said. "Our economic models are evolving, too. In the Ford economy, you got what was available: one car, one color; in the Starbucks economy you got what you ordered, no matter how complicated; and now in the Pandora economy, you get what you like because the service keeps learning about you, tuning itself to your needs and desires."

Welcome to the Microsoft economy, which has yet to be clearly defined beyond a general customer-centric approach.