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Microsoft Reorgs Search Unit

In an attempt to pull its search efforts out of a slow spiral, Microsoft Wednesday formed a new group to focus on search and advertising, and named two executives to head it.

Microsoft announced that Satya Nadella will join the Platform Services Division next month to lead the newly formed Search and Ad Platform Group. Nadella will report to division president Kevin Johnson. Nadella is currently corporate vice president responsible for Microsoft Business Solutions, which includes developing and marketing the Microsoft Dynamics line of business products.

Less noticed, though perhaps more notable, was the appointment of Harry Shum as chief scientist for the new group. Shum, who retains his job as managing director of Microsoft Research Asia, is a highly respected computer science researcher. Shum, who received his PhD in robotics from Carnegie Mellon University, joined Microsoft Research in 1996.

Given the size of China's developing economy, it's no surprise that one of the people guiding Microsoft's search and advertising efforts going forward is located in Beijing.

The reorg comes in the wake of Microsoft's almost glacial growth in market share compared to Google and Yahoo in the online search market -- upon which hangs much of the advertising revenues the company anticipates earning from its "software plus services" initiatives.

Microsoft has been trying to make headway against both Google and Yahoo for several years and yet -- despite huge infusions of cash, and Microsoft's monopoly position on the desktop -- it has only been able to manage a weak third place position.

"Aligning Search and our Ad Platform efforts under a single R&D leader is essential as we drive advances in our search, commerce and payments infrastructure, and evaluate change-the-playing-field opportunities," said a Microsoft spokesperson in an e-mail.

Nadella's slot in Microsoft Business Solutions will be temporarily filled by Tami Reller, corporate vice president of Microsoft Dynamics, reporting directly into Jeff Raikes, president of the Microsoft Business Division.  

The announcement of the reorg comes on the heels of a mass departure of executives involved in Microsoft's search efforts. For instance, earlier this month Christopher Payne, the corporate vice president in charge of Windows Live Search (formerly MSN Search) announced his departure.

About the Author

Stuart J. Johnston has covered technology, especially Microsoft, since February 1988 for InfoWorld, Computerworld, Information Week, and PC World, as well as for Enterprise Developer, XML & Web Services, and .NET magazines.

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