Mr. Johnson, a longtime Microsoft veteran, is taking the CEO post at Juniper Networks, a networking and security solutions company. He had little advertising experience when he was named president of Microsoft's platform and services division, where he oversaw Windows and Windows Live as well as Microsoft's online media properties and advertising businesses. Microsoft is splitting those two responsibilities into separate divisions, both of which will report to CEO Steve Ballmer.
Microsoft has certainly struggled in the internet advertising space, having spent billions on research and development for the division and running it at a loss, despite consistently logging double-digit gains in advertising revenue. Mr. Ballmer has said that within four to 10 years, advertising will account for as much as 25% of Microsoft's business, and that his goal with search is to own 30% of the search market. Right now Microsoft has about 10% share.
Turning the software behemoth into a larger ad player is clearly a big job. An inside candidate for the position appears to be Senior VP Brian McAndrews, the former CEO of aQuantive, which was acquired by Microsoft for $6 billion last year. Mr. McAndrews has an excellent reputation in the advertising world, and there was much speculation on why he chose to stay on after the acquisition. People close to Microsoft speculated that the chance to become a Microsoft president was the kind of opportunity that could keep him there.
Microsoft said it is creating a new senior lead position for the online-services division and launching a search for candidates. It also said Senior VPs Steven Sinofsky, Jon DeVaan and Bill Veghte will head the Windows division. In the meantime, Senior VP Satya Nadella will lead Microsoft's search, MSN and ad-platform engineering group, while Mr. McAndrews will continue leading the advertiser-publisher services group. Mr. McAndrews' group largely focuses on display-advertising opportunities for Microsoft.