The new name means both spider or cloud in Japanese, so it would fit a search engine as well as a cloud-based service.

At this time the news should be taken with several proverbial grains of salt. According to a LiveSide report, this aren’t quite settled down in Redmond, but the Kumo name has been making serious round recently:

“While Microsoft employees have admitted publicly that there are branding issues around Live Search, we’re not quite ready to stick our heads above the parapet and say that Kumo will be the new brand name to be announced in a 2009 update.”

It’s still unclear why would Microsoft want to change its brand again. The recent campaigns launched from Redmond have ended in failure (remember the Jerry Seinfeld and Bill Gates clips?), a good hint that Microsoft should sit down and re-think its marketing strategy.

Furthermore, the Live brand now has several different services bearing its banner, it’s hard to see why would one company need to confuse its customers over and over again. In the end, the customer either doesn’t care or gets sick of this branding merry-go-round and seeks another product from another company.

Then again, maybe this is just one of Microsoft’s marketing attempts to raise public awareness about one of its future online project. The Kumo site is already, but can’t be accessed from outside Microsoft. So be patient and time will reveal everything.