Remember back in 2005 when Microsoft CEO Steve Ballmer was so ticked with the brain drain Microsoft was losing to Google that when Microsoft search VP Kai-fu Lee, the guy who started Microsoft Research China, walked into Ballmer's office and said he was going to Google too Ballmer threw a chair across the room and vowed to "fucking bury" Google CEO Eric Schmidt?

Microsoft then sued to enforce Lee's non-compete, an entertaining five-month affair that ended in them settling out-of-court.

Anyway, Lee's departure from Google last week apparently had none of the drama queen elements of his last resignation.

Lee, who was president of Google China, is turning angel/early stage investor, forming an tech incubator in Beijing called Innovation Works that has already raised (on Google's dime) a reported $115 million (800 million yuan) from Lenovo parent Legend Holdings, contract manufacturers Hon Hai Precision Industry and Foxconn, VC WI Harper Group and YouTube co-founder Steve Chen.

Lee expects to foster five Chinese Internet, mobile and plain ole IT start-ups a year.

It's gonna take two people to replace Lee. Google has named Boon-Lock Yeo, currently director of its Shanghai engineering office, to run engineering for Google China and John Liu, currently responsible for Google sales in greater China, to take over Lee's business and operational responsibilities. Google said it's doubling its sale force. It still trails local rival Baidu. It's got 20% of the market to Baidu's 76% according to iResearch.

The Wall Street Journal quoted Citigroup analyst Mark Mahaney as saying that "there has not been a dramatic change in Google's fortunes in China." He estimates that Google, the butt of many a Chinese censor, only gets 2% of its revenue from the People's Republic, a puny $300 million.

Google these days has been having the same brain drain that Microsoft experienced.

See www.innovation-works.com.