Michael Arrington from TechCrunch is reporting that Microsoft is at work on a new "very cool" search product at its Mountain View campus.

Microsoft has gathered a team of twenty or more “rock star” developers who’ve been tasked at building their next generation search engine, a source has told us. The team, which supposedly came together recently, is based at Microsoft’s Silicon Valley headquarters in Mountain View.

We have few details on their approach to the product, other than hearing that it is definitely a “horizontal” engine (so, it’s not limited to a specific vertical like images), and is “very cool.”

Arrington goes on to report that Sanaz Ahari, who started Live.com (and Start.com before it), is heading up the project.

Far too early to read much into this, of course.  Seems like the original Windows Live Search was going to be "very cool" too, however.

 Update: John Battelle seems to have information that this secret project isn't quite what Arrington reported.  Oooh, the plot thickens!