Microsoft tweaks organization to focus on Web services

Scott Hillis

SEATTLE: Microsoft Corp. said on Thursday that it is building a team that

"will develop a premium subscription service for consumers that includes

premium elements of Microsoft's current MSN service, as well as services based

on current consumer software offerings such as Encarta, Money, PictureIt! and

others," the company said in a statement.

The move was done as part of a minor organizational change at the world's top

software maker, which is focusing its energies on its .NET strategy to turn its

software into Web-based services that can be accessed on different devices. The

new group, dubbed the Personal.NET team, will be part of a new Personal Services

Group led by Microsoft's group vice president of .NET services, Bob Muglia the

company said.

Microsoft didn't elaborate, but a company spokesman said the idea will go

hand in hand with HailStorm, the first concrete step of .NET unveiled last month

that will build services around things like instant messaging, online calendars

and shopping.

"The Web is evolving from individual sites to a more integrated set of

services, so we are evolving our business and realigning the work we've done in

recent years," spokesman Matt Pilla said. "We haven't defined what

those services are yet but they are going to be subscription services,"

Pilla said. Microsoft shares rose $4-13/16, or 9.3 per cent, to $56-3/4 on

Thursday amid a rebound among many technology stocks.

Battle over web services



MSN consists of two parts. The first is an Internet access business in which
more than four million consumers pay a monthly fee for Web and e-mail accounts.

MSN also runs a family of Web sites, visited by more than 200 million people

worldwide a month, that includes the MSN.com portal, MSNBC.com news site,

Carpoint automobile buying service, HomeAdvisor home buying site, and others.

The battle for Web surfer loyalty is fierce, with AOL Time Warner Inc.'s

America Online service and Yahoo! Inc. being Microsoft's chief rivals. They are

all trying to figure out how to set up Web-based services that their audiences

and customers will pay for, and Thursday's announcement showed Microsoft plans

to achieve that by integrating MSN with its traditional software products.

"There's going to be lot of collaboration between those groups to make

sure there's a comprehensive set of services that people can get online,"

Pilla said. The structural tweaking also put the vice president of MSN, Yusuf

Medhi, in charge of personal services businesses that will take care of network

programming and sales for MSN and other software services, Microsoft said.

Jeff Raikes will continue to oversee the productivity and business services

group that makes the Office line of business software products. Jim Allchin will

stay in charge of the platform products group that develops the Windows

operating system.

Microsoft said the move was a "fine-tuning" of a larger

reorganization in February in which it named its consumer unit chief, Rick

Belluzzo, to the post of chief operating officer.

(C) Reuters Limited 2001.