Microsoft Reassigns Several Top Executives

Microsoft announced a sweeping shake-up of its executive ranks Thursday, placing new executives over operations facing fierce new competition from Google, Apple and cellphone makers.
The announcements were part of a broad management reorganization involving seven new senior vice presidents and seven new corporate vice presidents.

One of the more significant leadership changes was in the cellphone operations. Andy Lees was named senior vice president for mobile communications operations. Mr. Lees, who had overseen the server business, succeeds Pieter Knook, who, the company said, “made the decision to leave Microsoft to pursue other opportunities.”

Microsoft has been paying more attention to its cellphone business following the introduction of Apple’s iPhone and Google’s Android software operating system. In only a few months of the iPhone’s release, according to Canalys, a market research firm, Apple gained 28 percent of the smartphone market in the United States, a greater share of the market than the cellphones using Microsoft’s Windows Mobile software. Research In Motion, maker of the BlackBerry, leads the category that has been dominated by phones made for business users.

Microsoft is showing more interest in the consumer market. This week it announced it was buying Danger, the maker of the popular Sidekick cellphone.

Analysts said that Microsoft was moving to confront a growing competitive threat from a range of companies that have positioned themselves to offer Web-based alternatives to Microsoft’s core office-productivity applications. The other major change was the replacement of Steve Berkowitz, the current senior vice president of Microsoft’s Online Services group. Mr. Berkowitz, the former chief executive of the online site Ask Jeeves, was hired with great fanfare in April 2006 to help revive Microsoft’s search and portal operations. Microsoft has been unable to make a dent in Google’s growing dominance in search and search advertising. Mr. Berkowitz will leave the company this August, the company said.

Responsibility for online operation was split among three executives who will work in the combined organization that handles both Internet activities and the Windows operating system, which is run by Kevin Johnson.

Satya Nadella, will be the senior vice president for the search, portals and advertising group. Mr. Nadella is on the engineering side of Microsoft, and will look after the technical side of Web search, advertising systems and related systems. He will also have responsibility for the programming of the MSN portal.

Bill Veghte, will be the senior vice president for online services and Windows, handling sales, marketing and product management both for Windows and online operations.

Brian McAndrews, the senior vice president of the advertiser and publisher solutions group, will look after the strategy and marketing of Microsoft’s online activities jointly with Mr. Veghte and Mr. Nadella.

More news
Microsoft shuffle leads to many promotions
Microsoft made its leadership changes official on Thursday, promoting more than a dozen executives and confirming the departure or pending departure of three top executives.

As expected, Windows VP Mike Sievert, online services senior VP Steven Berkowitz, and Windows Mobile head Pieter Knook are all leaving the company. Knook is heading to a new post at Vodafone, Sievert plans to start his own company, and Berkowitz will stay at Microsoft through August, as his duties transition to other executives.

Microsoft promoted several executives to fill the departures. Bill Veghte moves from VP to senior vice president and adds responsibility for the business strategy for Windows, Windows Live, MSN, and search. Satya Nadella gets a similar title bump and adds programming and engineering oversight for MSN to his search-related responsibilities. Collectively, Vegthe, Nadella and former Aquantive CEO Brian McAndrews will take over Berkowitz's duties.

Filling Knook's role is Andy Lees, who becomes senior vice president of the mobile communications business. The move represents Lees' first mobile-related duties during his long tenure at Microsoft.

Brad Brooks, formerly a general manager in the Windows unit, will take over as head of consumer marketing for the operating system, assuming Sievert's responsibilities.

Roz Ho, former head of Microsoft's Mac unit, will become a corporate VP and lead the Danger team once Microsoft completes that acquisition. Microsoft's press release also notes that Ho will continue in her stealth role leading "various consumer-focused premium mobile offerings in mobile communications."

A Microsoft representative would not offer any further details, but ZDNet blogger Mary Jo Foley notes that Ho has been leading a project known as Pink and Purple aimed at bringing Zune experiences over to Windows Mobile.

Steve Guggenheimer, who had been in application platform marketing, becomes a corporate VP, heading Microsoft's relationships with computer makers.

Developer unit head S. Somasegar and Office executives Chris Capossela, Kurt DelBene, and Antoine Leblond each become senior VPs, but maintain largely their same responsibilities, with four other executives adding the VP title.

Market research: PlayStation 3 is going the top-selling next-gen console by 2011

For more than a year, the whole world has seen Sony's PlayStation 3 get its rear handed to it by Nintendo's Wii and Microsoft's Xbox 360.

But if a three-year forecast from market research firm iSuppli is to be believed, the PS3 could out pace both the Wii and the Xbox by 2011.

Since its release in November 2006, the Wii has been the most successful of the next-gen consoles, far eclipsing Microsoft's Xbox 360 and leaving the PS3 in the dust.

But because the Xbox had a full year's head start on both the Wii or the PS3, it still had the overall sales lead.

Now, however, that lead looks imperiled, and according to a report in Information Week, the Wii could soon become the overall sales leader among the three consoles.

The article cited market research firm iSuppli as determining that by the end of 2008, the Wii will have sold a total of 30.2 million units, 17.5 percent higher than the projected 25.7 million Xboxes Microsoft will have sold.

But the really interesting news in the iSuppli report is a forecast that by 2011, the PS3 could be the top console. The research firm predicted that by the end of 2011, the PS3 could have sold 38.4 million units, while the Wii might be in second place at 37.7 million.

Of course, three-year forecasts have about as much chance of being right in electronics as predictions of who will win the World Series in three years.

Still, for anyone to put their name to a forecast that the PS3 could emerge from its doldrums is actually quite noteworthy. And for me, it's a hint of future validation since in the fall of 2006, I wrote a story suggesting that the PS3 would be the eventual winner of the next-gen console wars.

Shortly thereafter, of course, that suggestion made me look rather foolish when Sony's much-publicized problems with production and overpricing got the PS3 off to an extremely poor start. And with the surprise success of the Wii, my prediction looked even more foolish, even though Sony said from day one that it views its consoles as 10-year plays.

And of course, iSuppli's forecast could be just as far off base as mine was. But the fact that it is willing to make such a prognostication here, in 2008, is gratifying. Even if it's a bit mystifying.

From news:
Sales of PlayStation 3 top Xbox 360 in January
Sony's PlayStation 3 video-game console topped Microsoft's Xbox 360 in U.S. unit sales for the first time in January, but the Redmond company said its sales were hurt by supply shortages.

The PlayStation 3 sold 269,000 units for the month, according to statistics released by the NPD Group market research firm. That was just behind Nintendo's Wii, which sold 274,000 units, NPD said. Microsoft sold 230,000 Xbox 360 consoles.

"We certainly believe that this is an anomaly," said Microsoft spokesman David Dennis of the Xbox 360's third-place finish.

The company said this week that higher-than-expected demand for Xbox 360 during the holidays caused subsequent shortages.

Sony, in a statement, pointed to progress in areas including movie studios' embrace of the Blu-ray next-generation DVD format, which the PS3 uses. Jack Tretton, Sony Computer Entertainment America chief executive, said that it's "shaping up to be a breakthrough year for us."

Sony's PlayStation 2 dominated the previous console generation, but the PS3 has struggled to find its footing.

Nintendo's popular and lower-priced Wii has experienced repeated shortages since its launch in November 2006. Redmond-based Nintendo of America said in a statement Thursday that demand for the Wii continues to outstrip supply. The company said sales last month were affected by its previous decision to shift some of January's hardware supplies into December, to boost availability over the holidays.

Microsoft's Dennis noted the company is "working to do everything we can to replenish the inventory."

The company noted that overall U.S. spending on Xbox 360 hardware, software and accessories was $297 million for the month, compared with $244 million on Wii and $219 million on the PS3.