Microsoft execs move up, out

As Microsoft's strategy for linking its past to its future has evolved over the past three years, so too has the team of leaders overseeing that transition.

The leadership tweaks and churn continued this week with a Valentine's Day reorganization that consolidates sales and marketing of Windows, the company's historic profit gusher, and online services, its newer and unprofitable effort to compete with Google. Both will operate under one executive.

Bill Veghte, a company veteran who has held major product and sales leadership roles at Microsoft, was promoted to senior vice president of the Online Services and Windows Business Group.

That was one of 14 promotions — and three departures — announced Thursday in a relatively minor reorganization by past Microsoft standards. The company often announces management moves at this time of year, after it completes its annual strategy review.

Matt Rosoff, an analyst at Directions on Microsoft, isn't reading too much into the changes given that they're centered on the part of Microsoft that would be most affected by a Yahoo acquisition.

"I suspect there will be further changes, particularly if the Yahoo acquisition goes through," Rosoff said.

Microsoft offered $44.6 billion for Yahoo, which formally rejected the bid Monday. Yahoo is reportedly negotiating a deal with News Corp. as an alternative or a bargaining tool to drive up Microsoft's bid.

The team of executives leading the online-services business would play an important role in integrating Yahoo.

One key player with more responsibility is Satya Nadella. He was tapped last spring to head research and development in a new group joining both Internet search and Microsoft's ad platform.

His role now includes programming and engineering at MSN, the company's Internet portal and "our single largest source of ad revenue," he wrote in a message to employees that tech blogger Om Malik posted on his site.

"We are going through a period of intense road map execution, while also having to deal with organizational change and the news of our proposal to acquire Yahoo," Nadella wrote, acknowledging "all this does cause anxiety."

Brian McAndrews, senior vice president of Microsoft's Advertiser and Publisher Solutions group, plus Veghte and Nadella now have "expanded roles running the business strategy, sales, marketing and engineering efforts for Windows Live, Search and MSN," according to the company's statement.

McAndrews was formerly chief executive of aQuantive, the Seattle online-advertising company Microsoft bought last year for $6 billion.

The three are assuming some of the responsibilities of Steve Berkowitz, a high-profile Microsoft hire who is leaving the company in August.

Other departures announced Thursday include Michael Sievert, formerly in charge of Windows marketing, who is leaving to "pursue new endeavors"; and Pieter Knook, who was in charge of the mobile-communications business and has taken a position with Vodafone. Knook will be replaced by Andy Lees, another Microsoft veteran.

The loss of those leaders will likely have little impact on the company's stock, said Sid Parakh, analyst at McAdams Wright Ragen.

"It's such a large company, and the depth of management that they have there is pretty good, so changes like these are actually welcome in a way," he said.

The McAndrews, Nadella, Veghte triumvirate will report directly to Kevin Johnson, president of Microsoft's 14,000-employee Platforms and Services Division.

Rosoff said Johnson, after taking over in September 2005, assessed the organization and then began thinking strategy.

"It looks like it's moved from build to buy," Rosoff said, noting the acquisitions of aQuantive and the bid for Yahoo. "And as that's been happening, they've had to find the leaders who would be willing and able to carry out that kind of strategy."

Nadella, in his message, emphasized the importance of improving Microsoft's own offerings.

"Our investment and focus on innovation in search, portals and advertising will continue, independent of changes to our team or in the company," he said.

In another promotion announced Thursday, analysts saw Microsoft gearing up for competition with Apple's hugely successful iPhone.

Roz Ho was put in charge of a new "premium mobile experiences" team, assigned to build consumer-focused products in mobile communications. The team would eventually include Sidekick-maker Danger, which Microsoft is planning to acquire, reportedly for $500 million.

For the past year, Ho was general manager of the company's entertainment and devices think tank, where she worked with Zune and Xbox godfather J Allard. Previously, she was general manager in Microsoft's Macintosh Business Unit.

"Given her experience and the Danger acquisition, whatever comes out of her group is going to be Microsoft's answer to the iPhone," Rosoff said.

Benjamin J. Romano: 206-464-2149 or bromano@seattletimes.com

This story, originally published Feb. 15, was corrected on Feb. 16. Microsoft's new corporate vice president of the Developer and Platform Evangelism Group is Walid Abu-Hadba. Due to incorrect information from the company, his name was misspelled in a story Friday.