Microsoft Splits Platforms & Services Division As Online Chief Departs

Microsoft late Wednesday announced plans to split its Platforms & Services Division (PSD) into two groups, in a major reshuffle in which Kevin Johnson, president of the PSD, will leave the company.

Juniper Networks Thursday confirmed that Microsoft veteran Kevin Johnson will take over as its new CEO when he joins the networking vendor in September. Current Juniper Chairman and CEO Scott Kriens will hold onto his chairman spot and remain active in strategy and leadership development, according to a statement from Juniper, Sunnyvale, Calif. Kriens has held Juniper's top executive spot since 1996.

Johnson, who joined Microsoft in 1992 and has led the PSD since 2005, was responsible for product development, marketing and strategy for Microsoft's Windows and Online Services businesses. He was also part of the team that led Microsoft's thus-far unsuccessful bid to purchase Yahoo.

"Kevin has built a supremely talented organization and laid the foundation for the future success of Windows and our Online Services Business. This new structure will give us more agility and focus in two very competitive arenas," Ballmer said in a statement.

Kevin Johnson

Johnson's departure isn't surprising in light of the poor performance of Microsoft's Online Services Business, which reported a $488 million loss in operating income in its recently concluded fiscal fourth quarter, compared to $210 million during the same quarter last year. For the year, the Online Services Division racked up an operating income loss of $1.2 billion, compared to $617 million the previous year.

In the re-organized PSD, one group will be called Windows/Windows Live, the other Online Services, and both groups will report directly to Microsoft CEO Steve Ballmer.

Microsoft will establish a new senior position to lead the Online Services group, and will look both inside and outside the company to fill that role.

Effective immediately, senior vice presidents Steven Sinofsky, Jon DeVaan and Bill Veghte will lead the Windows/Windows Live group, which is in the process of developing Internet Explorer 8, Windows 7, and the next generation of the Windows Live product suite.

"Our Windows business is firing on all cylinders," Ballmer said in a statement. "We see tremendous opportunity in search and advertising, and we have a clear strategy for investing in success today and growth in the future."

Updated Thursday, July 24 at 9:33 a.m.