Visual Studio Online - Administrators without rights: "AAD guest users are not allowed to search in AAD"

Playing with Visual Studio Online is sometime like playing with fire. It works great 99.99% of time, but from time to time you have a problem and you cannot find easily support.
In this post we will talk about what you need to do

when you want to add a new user and you end up with 401 or 403 error code.
This days we wanted to add a new user to our Visual Studio Online project. In the portal, when we wanted to add the new user we ended up with the following error:

"AAD guest users are not allowed to search in AAD"

This happens when we want to add a new user to a group. Even if we were administrators, we were not able to do any change. This was something new for us, 2 weeks ago everything was fine.
What happen in the last period of time. Our company integrated our own AD with Azure AD. To be able to use your administrator's rights on Visual Studio Online you need to be added to Azure AD (even if you have a LIVE account) as Member. By default you will be Guest.
PowerShell Command:

Set-MsolUser -UserPrincipalName user@company.com -UserType Member

Source: http://blogs.technet.com/b/ad/archive/2014/08/15/prepping-for-new-management-features.aspx
Before doing this, you might need to add the user to AAD.

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