Microsoft Loses Top Exec to Juniper - Sign of Online Failure

 |  Includes: JNPR, MSFT
by: Ron Haruni

Microsoft’s Kevin Johnson, president of the Platforms & Services Division, has decided to leave the company to head up Juniper Networks (NYSE:JNPR), a Silicon Valley maker of networking hardware.

Johnson, who is 47 years old and has been with Microsoft (NASDAQ:MSFT) for 16 years as one of three divisional presidents under chief executive Steve Ballmer, was seen as the point person in the company’s attempt to acquire Yahoo (NASDAQ:YHOO). Whether this development will further complicate matters for Yahoo! is still unclear.

However, according to WSJ, Johnson’s departure as the executive in charge of Microsoft’s Windows and Web operations, is a reflection of deep dissatisfaction by Microsoft’s CEO Steve Ballmer with the performance of the company’s online business. Mr Ballmer however, officially paid tribute to Mr Johnson on Wednesday.

“Kevin has built a supremely talented organization and laid the foundation for the future success of Windows and our Online Services Business,” he said.

The chief executive insisted that the Windows business was ”firing on all cylinders” [Via FT].

Despite billions of dollars invested into online services, Microsoft has only been able to watch as Google Inc. (NASDAQ:GOOG) increases its market share dominance while grabbing most of the profits.

In a memo to Microsoft employees, [via AllthingsD], Mr. Ballmer vowed to “out-innovate Google” in Internet search by “upping the ante” in research and development, as well as by acquisitions.

Well, I’d say wishful thinking is one thing, reality is another. Ballmer keeps repeating himself without delivering concrete results. So far, Microsoft’s inability to progress in its online business is quite obvious, lying a distant third to Google and Yahoo. What’s more, Microsoft’s only chance to gain market share and close the gap with Google seems to be lost now, with the abandonment of its bid for Yahoo.

Meanwhile, in a statement, Mr. Johnson described Microsoft as a "special place that presents opportunity to so many." Since assuming his role as President of Platforms & Services Division in September 2005, Johnson successfully launched Windows Vista to consumers and commercial customers, resulting in record-breaking Windows revenue of nearly US$15 billion in fiscal year 2007. “I have been so fortunate," he added, "to have experienced 16 amazing years of building Microsoft’s business.”