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?