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Microsoft shakes up online services arm
By Richard Waters in San Francisco
Published: August 14 2007 03:00 | Last updated: August 14 2007 03:00
Microsoft on Monday shook up the organisation and management of its online services business following its $6bn purchase of advertising services company Aquantive, marking its latest attempt to catch up with Google and Yahoo.
The overhaul included a new organisational structure that closely resembles one that had been planned at Yahoo by Terry Semel, its former chief executive officer, although Yahoo has since turned its back on the arrangement.
Microsoft said it had split the management of its online services business, giving control of all its advertising activities to Brian McAndrews, the former chief executive of Aquantive. Advertising had previously been overseen at Microsoft by Steve Berkowitz, the executive in charge of its internet group, who will now head only the part of the business that is responsible for attracting the company's online audience.
The split between advertising and audience groups would create a clear division of responsibilities that would let both sides focus more clearly, said Mr McAndrews, adding: "It makes perfect sense to me."
Yahoo recently abandoned a similar plan after naming Jerry Yang as its new chief executive, saying at the time that it was unnecessary.
Mr McAndrews' appointment also marks the arrival of an injection of new blood designed to make Microsoft more than an also-ran in the advertising business. The senior management team for Microsoft's new advertising group is made up of former Aquantive executives, with the exception of Satya Nadella, who will be responsible for the advertising technology platform. Yusuf Mehdi, Microsoft's former chief advertising strategist, had been appointed to a new role as senior vice-president in charge of strategic partnerships for the company's broader platforms and services division, Microsoft said.
Integrating Microsoft's AdCenter search engine advertising business into the other Aquantive online operations would position the new division for the changes that now are likely in online advertising, said Mr McAndrews.
While the growth of search had been the big trend in the first part of the decade, he said, advertisers were now interested in a broader mix of display, rich media and web video, and search was set to take its place in these more integrated online campaigns.
Copyright The Financial Times Limited 2007
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