msnbc.com news services
updated 7/23/2008 11:22:50 PM ET 2008-07-24T03:22:50

An earlier version of this story attributed dissatisfaction with Microsoft's failed bid for Yahoo to the wrong executive. It was Microsoft CEO Steve Ballmer who grew frustrated by the stalled negotiations, according to a Wall Street Journal report posted on its Web site and cited by msnbc.com.

Microsoft Corp.'s executive in charge of its Windows and Web operations is leaving, the company said Wednesday.

A source briefed on the matter said Kevin Johnson, president of Microsoft's platforms and services division and part of the team that led the failed bid to acquire Yahoo Inc., will become the chief executive at Juniper Networks Inc., which makes equipment for communications networks.

Microsoft will undergo a reorganization, splitting the division that Johnson runs into two groups, one focusing on the Windows operating system and the other on search and other online services.

Three executives, senior vice presidents Steven Sinofsky, Jon DeVaan and Bill Veghte, working in the Windows division, will report directly to Chief Executive Steve Ballmer.  Microsoft will search for a new leader for its online services business. In the interim, senior vice presidents Satya Nadella and Brian McAndrews will remain in the lead of engineering and advertiser and publisher solutions.

(Msnbc.com is a joint venture of Microsoft and NBC Universal.)

Johnson had served since 2005 as president of the platforms and services division, which included the Windows operating system and Windows Live programs, such as Web e-mail and instant messaging. The division also included online advertising, search and Microsoft's MSN sites.

Johnson's three years at the helm overlapped with the release of Windows Vista.

“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 in a statement. “It has been a pleasure to work with Kevin, and we wish him well in the future.”

Johnson, who joined Microsoft in 1992, will help with the transition, Microsoft said in a statement.

The departure of Johnson, who worked closely with Ballmer during its on-again, off-again negotiations with Yahoo, is another setback for Microsoft's struggling online business, a field in which the company is trailing Google Inc.

Microsoft had offered to buy Yahoo for nearly $50 billion in early May, but Yahoo refused the offer, then opened negotiations with the software giant before finally partnering with Google, a move that angered Microsoft and may draw scrutiny from antitrust regulators.

Johnson also spearheaded the $6 billion acquisition of online advertising company aQuantive in 2007. Incorporating aQuantive has boosted Microsoft's Web ad revenue, but not enough to put the software maker in league with leader Google.

A source close to Microsoft said that Johnson has been searching for an opportunity to run his own company.

Johnson's departure is another sign of a changing of the guard within Microsoft's top ranks. Bill Gates, Microsoft's non-executive chairman, stepped down from day-to-day duties at the company at the end of June to focus on philanthropy.

Jeff Raikes, who had led Microsoft's Office business, announced earlier this year that he also planned to leave the company. He later accepted the CEO job at Gates' charitable organization, the Bill & Melinda Gates Foundation.

Microsoft did not announce when Johnson would leave.

“Microsoft is a special place and presents opportunity to so many,” Johnson said in a Microsoft statement. “I have been so fortunate to have experienced 16 amazing years of building Microsoft’s business, learning from great leaders in the company and working with phenomenally talented people.”

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.71%
$30K home equity loan FICO 5.26%
$75K home equity loan FICO 4.70%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.42%
13.42%
Cash Back Cards 17.94%
17.94%
Rewards Cards 17.15%
17.14%
Source: Bankrate.com