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Monday, June 3, 2013

Microsoft Weighs Restructuring

Microsoft is considering mixing up the responsibilities of its top executives as it seeks to further its transformation into what Steve Ballmer, Microsoft’s chief executive, calls a “devices and services company.”

Mr. Ballmer is contemplating a number of restructuring paths, none of which have been finalized, said a person familiar with the discussions who did not want to be named when talking about confidential matters. But it’s likely the changes will result in shifts in responsibilities for Qi Lu, the president of Microsoft’s online services division; Tony Bates, president of Skype; Don Mattrick, president of interactive entertainment; and Satya Nadella, president of server and tools, this person said.

All Things D first reported news of the planned restructuring. Dawn Beauparlant, a spokeswoman for Microsoft, declined to comment.

Microsoft used to restructure its divisions with some regularity, but the current shake-up would be the first of any significance at the company in nearly five years, when Microsoft divided Windows and online services into their own divisions after the departure of an executive, Kevin Johnson.

Mr. Ballmer has long been criticized for the company’s weak stock performance under his leadership and missteps by the company in the mobile phone, tablet and search markets. A recent report by Rick Sherlund, a longtime analyst at Nomura, said Mr. Ballmer could face a bigger push for change at the company by frustrated shareholders. Mr. Sherlund wrote that shareholders could press Microsoft to exit the Internet search business, off-loading its Bing site to Facebook or Yahoo, and to sell its Xbox video game unit, which is not a large part of its overall business.

However, the planned restructuring does not appear to include a big retrenchment in those categories. On the contrary, it looks as though the changes are intended to bolster a vision for Microsoft that Mr. Ballmer articulated in a letter to shareholders last October, when he said Microsoft sees itself as a devices and services company.

That description suggested a bigger emphasis at Microsoft on the design and creation of hardware, such as its Surface family of tablet computers, and services like search that are coupled to such devices. Microsoft also recently announced plans to release a new game console, Xbox One, in time for the holiday season.