Microsoft Executive Shakeup Prepares for Yahoo Acquisition

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Microsoft has confirmed a number of high-level executive changes, moves that could be designed to better position the company to digest an acquisition of Yahoo, an analyst said.

In addition to a number of executive promotions, Microsoft announced that Bill Veghte, senior vice president of the Online Services and Windows Business Group; Satya Nadella, senior vice president, Search, Portals and Advertising Group; and Brian McAndrews, senior vice president of Microsoft's Advertiser and Publisher Solutions Group, are all taking on new responsibilities in running Microsoft's online services, including Windows Live, Search, and MSN.

Microsoft may be positioning Nadella to take on the responsibility of the technical integration of Yahoo if the acquisition happens, said Rob Helm, an analyst at Directions on Microsoft. "Microsoft is anticipating a shift in its online strategy around the purchase of Yahoo, which means, among other things, that they're replacing people running the old strategy," he said.

If Nadella is being brought in to integrate Yahoo into Microsoft, he doesn't have the best track record, said Helm. He was the head of the Microsoft Dynamics unit and was charged with integrating a couple of other acquisitions, including Great Plains. "On his watch, relatively little happened in the way of successful integration," said Helm. However, Nadella had the post for just a year, so perhaps he didn't have the opportunity to do more, he said.

Steve Berkowitz, senior vice president of the Online Services Group, is moving out of a role in Microsoft's online group. He'll step down from his position in August, Microsoft said. He plans to stay with the company, but Microsoft did not say in what capacity.

Yahoo Deal Still Uncertain

Despite these positioning moves, the Yahoo deal is still uncertain, Helm said. "It's still up in the air, though it seems unlikely that Microsoft would walk away after a bid like this," he said.

Microsoft also said that Andy Lees, who leads marketing for the Server and Tools Marketing and Solutions group, will take over for Pieter Knook as senior vice president of the Mobile Communications Business. Word of Knook's departure surfaced on Thursday with an announcement from Vodafone that he'd joined the mobile operator.

Lees' appointment, as someone with a marketing background, seems to follow a shift in the mobile group toward a focus on consumers, Helm said. Microsoft recently announced plans to buy Danger, a youth-focused mobile software company, and appointed a new marketing executive to target consumers. Pressure from the iPhone, which has done remarkably well in a very brief time, could be driving the shift in strategy for the mobile group at Microsoft, Helm said.

Other announcements from Microsoft include news that Brad Brooks will take over for Michael Sievert, who is leaving the company, as corporate vice president of Windows Consumer Product Marketing. Steve Guggenheimer will become corporate vice president of the Original Equipment Manufacturer Division, moving on from a marketing position with Microsoft's Application Platform effort.

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