Official: Microsoft Management Reorg Announced; Dueling Ad Groups?

We expected a management shuffle from Microsoft today, and now they’ve delivered it. The company has announced seven new senior vice presidents and seven new corporate vice presidents. I’ll focus on the search and advertising front, where we now have two different senior vice presidents overseeing advertising. Best I can tell, one’s looking after search ads, and the other will pick up everything else.

From the release:

Satya Nadella, senior vice president, Search, Portals & Advertising Group. Previously corporate vice president, Nadella will continue to lead Microsoft’s engineering efforts across Live Search, Microsoft adCenter, and Subscriptions, Points and Billing platforms. He will also take over responsibility for MSN programming and engineering.

Nadella was named to head the new "Search & Ad Platform" group just about a year ago. What was going on with the MSN portal area when that happened always seemed unclear. Now along with being promoted, it seems his group has been expanded to pick up the area that previously was being overseen by Steve Berkowitz (now confirmed on his Microsoft bio and is reported in today’s release to be leaving, staying to help with transitions through August 2008).

Berkowitz’s departure was expected, and putting the portal area into the search and advertising group seems to make sense, in terms of streamlining and assuring a unified direction. Of course, Microsoft is still stuck with two different brands — MSN & Live — of which the latter still has yet to catch on.

The move also puts Nadella on the same level as Brian McAndrews, senior vice president of Microsoft’s Advertiser and Publisher Solutions Group, who came on into that position as part of the restructuring last August. But therein lies more confusion — both groups are involved with advertising?

Previously, Nadella was described as overseeing the ad technology side while McAndrews was covering the "monetization engine."

Since he came on, McAndrews has made a number of comments about search getting "too much credit," such as last month. From my perspective, search has fought to barely get the credit it deserves, and now that the search engines are all display happy, it’s going to continue to struggle. Indeed, when McAndrews says:

The current system for tracking ad conversions, while the best available for years, is not optimal because it gives all credit to that last ad seen or clicked — often a search engine — and not any credit to other ad units the consumer may have seen prior that helped influence the user to seek more information about the advertiser.

I’d disagree. There are plenty of accounts where advertisers are doing poor tracking, so that they don’t realize that a search weeks before resulted in a direct navigation and purchase to a site. And please don’t get me going on the lifetime value of a search conversion — the person who finds that perfect site and then never searches for it again. They just keep going back to it, and search gets no further recognition.

My impression is that McAndrews isn’t a search person at heart. I don’t mean that negatively, nor do I disagree with his stated view that other forms of advertising online and electronically will continue to grow and get recognition. But it sounds like he’s going to be the non-search ads vice president, while Nadella’s going to be the search ads VP. And that’s fine, though if Microsoft is trying to succeed in online advertising, having search segregated off from the cool kids of display, online video ads, gaming ads, and more is probably going to be an issue down the line.

For discussion on the reorg from across the web, see here on Techmeme.

Postscript: Om Malik has further memos. Satya Nadella Memo talks about building MSN into a next generation portal with the first of several top level objectives being to develop a "destination search experience." He also acknowledges the "anxiety" caused by having to deal with both a reorganization and possible further changes if Yahoo is acquired. As his group is called SPAG for short, which, I agree with Om, sounds pretty weird.

Meanwhile, I missed highlighting Bill Veghte before because his title of "senior vice president, Online Services & Windows Business Group" had neither search or ads in it. But in his promotion description, it says:

Previously corporate vice president, Veghte will build upon his leadership of the Windows business and will take on an expanded role that includes responsibility for all end-user business strategy, sales and marketing across Windows Client, Windows Live, MSN and Search. In addition, he will continue to have shared responsibility for OEM sales.

So before, we had Nadella-McAndrews confusion on ads. Now we get Nadella-Veghte confusion on search. And it gets more confusing. From the Kevin Johnson Memo at GigaOm, this:

Bill Veghte will lead the Online Services & Windows Business Group, with responsibility for all end user business strategy, sales, and marketing across Windows Client, Windows Live, MSN, and Search. I expect Bill and his team to strengthen our focus on a set of actions to transform how we market and connect with consumers. Bill’s organization will continue to include the Software Protection and Commerce teams, the Unlimited Potential group, and have shared responsibility for OEM sales.

Effective immediately, Bill will take on some additional responsibilities/teams for online services, including:

Search marketing (Brad Goldberg’s team) Windows Live marketing (Brian Hall’s team); and The Business Intelligence/Customer Intelligence team; the teams responsible for business development and partner management to support our end-user acquisition goals; and the mobile services strategy and marketing team. (Jon Tinter and a core part of his team) Satya Nadella will lead the Search, Portals, and Advertising Group (SPAG) and will have end to end content programming & engineering responsibility for Live Search, MSN, and our advertising platform. This alignment will enable our vision of reinventing our Search and Portal experiences by driving “Search to Content” and “Content to Search” and also enable the sharing of our data & data mining platform across the portal, search, and advertising teams.

So, Nadella’s in charge of Microsoft’s search and advertising engineering efforts, but the product and marketing side goes under Veghte?