A month or so ago I sat down for a strategy briefing from Kevin Johnson, the then-president of Microsoft responsible for Windows and online services. I never did get around to writing what I thought of that meeting, partially due to a request from Microsoft PR that the session be on background.
I enjoyed my time with Kevin, but wondered a bit about whether his strategy, outlined somewhat in this Fortune piece, was going to be enough to sate Steve Ballmer’s appetite for competing with Google.
Now we know. With Live Search, share has been lost, and with Yahoo, the deal is not closed. Here’s the spin:
REDMOND, Wash. — July 23, 2008 — Microsoft Corp. today announced that the Platforms & Services Division (PSD) will be split into two groups: Windows/Windows Live and Online Services, with both groups reporting directly to CEO Steve Ballmer. Microsoft also announced that PSD President Kevin Johnson will be leaving the company. Johnson will work to ensure a smooth transition.
“Kevin has built a supremely talented organization and laid the foundation for the future success of Windows and our Online Services Business. This new structure will give us more agility and focus in two very competitive arenas,” Ballmer said. “It has been a pleasure to work with Kevin, and we wish him well in the future.”
Effective immediately, senior vice presidents Steven Sinofsky, Jon DeVaan and Bill Veghte will report directly to Ballmer to lead Windows/Windows Live. The Windows organization recently announced strong annual sales, with more than 180 million copies of Windows Vista sold globally, and it has driven more than 100 million installs of its Windows Live suite. The organization’s innovation pipeline includes a new version of Windows Internet Explorer, the next version of Windows and the next generation of the Windows Live product suite.
In the Online Services Business, Microsoft will create a new senior lead position and will conduct a search that will span internal and external candidates. In the meantime, Senior Vice President Satya Nadella will continue to lead Microsoft’s search, MSN and ad platform engineering efforts. Microsoft recently announced a strategy to redefine search through innovations in the user experience and business models. As an example, the company’s cashback search program, announced in May, is already generating strong momentum among online shoppers and advertisers.
In addition, Senior Vice President Brian McAndrews will continue to lead the Advertiser & Publisher Solutions Group (APS). APS has great momentum, having signed more than 100 new publisher deals in the past year. McAndrews will continue to focus on the display advertising opportunity for Microsoft, driving execution and integration of advertising assets, including recent acquisitions such as Massive Inc., Navic Networks, ScreenTonic SA and YaData Ltd.
“Our Windows business is firing on all cylinders,” Ballmer said. “We see tremendous opportunity in search and advertising, and we have a clear strategy for investing in success today and growth in the future.”