Microsoft News Tracker

Microsoft’s online deck chairs have been in disarray since the departure in July of Kevin Johnson, but they got a new arrangement this week with veteran SVP Yusuf Mehdi picking up responsibility for MSN and Microsoft’s search properties. The best line award goes to Angela Gunn at BetaNews who opines:

Yusuf Mehdi is the new number-two for Microsoft’s Online Services division — but, as The Prisoner would be the first to ask, who is Number One?

A curious question, but par for the course of Microsoft’s online efforts.

Medhi, formerly Senior VP of Strategic Partnerships, has shifted his responsibilities from mergers and acquisitions to MSN and Microsoft’s search properties. He takes most of the job’s marketing and search tasks off the plate of Bill Veghte, the senior VP now focusing mainly on the Windows and Windows Live groups; Veghte picks up a new title, Senior Vice President for the Windows Business.

But Medhi isn’t stepping into the top spot for the online properties group, leaderless since Kevin Johnson jumped for Juniper Networks in the wake of the failed Yahoo acquisition. That leader will be…

…announced at some later date, says Microsoft. For now, Mehdi joins two senior VPs tasked with interim division leadership: Brian McAndrews, who manages the Advertiser and Publisher Solutions Group, and Satya Nadella, head of the Search, Portal, and Advertising Platform Group.

Until a new Online Audience Business head is hired, the three will report to CEO Steve Ballmer, who’s said to be still seeking a high-profile "get" — internal or external — for the top spot. A Microsoft spokesperson confirmed to BetaNews Tuesday afternoon that the search is still most definitely on for that person.

Mr. Ballmer is apparently asking volunteers to step forward and everyone is taking one step back. I’d suggest an immense signing bonus and a similar golden parachute.

Up until today Kevin John was the president of Microsoft’s Platforms & Services Division (PSD) which develops Windows and Microsoft’s online properties including Windows Live and MSN. Now Kevin Johnson is out and PSD has been split into two pieces reporting directly to Microsoft CEO Steve Ballmer:

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.
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Effective immediately, senior vice presidents Steven Sinofsky, Jon DeVaan and Bill Veghte will report directly to Ballmer to lead Windows/Windows Live.
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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.
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In addition, Senior Vice President Brian McAndrews will continue to lead the Advertiser & Publisher Solutions Group (APS).

So was Johnson pushed or did he jump? The rumor is that Johnson is now going to run Juniper Networks, which while nice enough, doesn’t seem like a sufficient opportunity to justify a voluntary departure so the smart money is on pushed.

One problem could have been Vista’s lackluster reputation, but Microsoft is still printing money with Windows so a more likely cause is the continuing disappointment from Microsoft’s online efforts. I’m sure it also didn’t help that Johnson was the point man on Microsoft’s attempt to buy Yahoo (or pieces thereof) which appears to have finally come to naught.

As for what it all means, I see no reason to expect significant changes in either products or financial performance - it was merely a rearrangement of the deck chairs which won’t be complete until new executives heading the two groups are named (assuming that Steve Ballmer doesn’t really want to run Windows/Windows Live himself). Any expectations of radical alterations are clearly premature.

This week, Microsoft announced the acquisition for an undisclosed sum of Navic Networks of Waltham, Mass., a privately held company with about 80 employees specializing in addressable advertising and interactive television applications. Much press comment has been to devoted to the interactive television technology which, for example, would let a user interactively request more detailed information during a commercial. This seems unlikely to me, but then I find it hard to believe that viewers sit for hours watching the home shopping networks.

The real pony to my mind is in the addressable advertising - via cable or satellite set top boxes Navic’s technology can individually address each consumer household, monitor what channel they are watching, and deliver targeted advertising on an individual household basis. Moreover, as Benjamin Romano reports at the Seattle Times, "Navic’s technology reaches some 35 million digital set-top boxes in North America via cable providers including Charter Communications, Cox and Time Warner."

With that kind of demographic information, Navic surely has a leg up in selling advertising although they do have to share the booty with the cable and satellite operators. It’s not all a bed of roses though, as the cable operators have also formed Project Canoe to sell targeted ads themselves while Google TV has partnered with Dish Network to do the same thing.

Still, the big question is why Microsoft wants to be in this business. Brian McAndrews recites the current Microsoft mantra, "In the long run, we want to be a platform across all media," but that only begs the question of whether the ad biz is really the most profitable investment for Microsoft’s cash.

Microsoft today made an omnibus executive rearrangement announcement covering a variety of Corporate and Senior Vice Presidents. Here are the novel aspects from my perspective:

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Microsoft today announced a new site that will be showing Microsoft Content Ads - the Wall Street Journal Digital Network:

The Wall Street Journal Digital Network today announced an agreement in which Microsoft Corp. becomes the exclusive third-party provider of contextual and paid search advertising for its network of sites, including The Wall Street Journal Online, Barrons.com, MarketWatch.com, AllThingsD.com and others.

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The addition of these sites brings an additional 20 million unique visitors per month to the extended Microsoft network, enabling advertisers to reach out to an increasingly deep and attractive audience in the financial services vertical. The Wall Street Journal Digital Network is expected to begin providing Microsoft contextual advertising in February.

It is a two year deal with unspecified financial terms and Microsoft displaced Pulse 360 and business.com. Google’s erstwhile acquisition DoubleClick will continue to provide banner advertising.

The good news here is that this isn’t another instance of Microsoft vending old fashioned banner ads placed by their crew of banner ad salesman, but modern content targeted ads available to all advertisers through MSN adCenter:

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