It's not just Yahoo!
Microsoft's
It was Johnson who sparked the Microhoo speculation last November, when he revealed that it was his company's goal to grow its slice of the search query market from 12% to 30% over the next few years. Since Google
Logic won out. Two months later, Microsoft was going public with its unsolicited offer for Yahoo!.
Johnson's exit leaves Microsoft at a crossroads. The company's online services are growing respectably, while also losing gobs of money. It doesn't get much better on the platform side, where the company has to persuade computer users to upgrade to Vista instead of bolting for the stylish simplicity of Apple
"In the competition between PCs and Macs we outsell Apple 30-to-1," notes Microsoft CEO Steve Ballmer in a company memo explaining last night's reorganization. "But there is no doubt that Apple is thriving."
Johnson's vacated role will be split in two, with three executives reporting directly to Ballmer on the Windows/Windows Live platforms. A new senior leadership position will be created to head up the profitless online-services division.
The executive shakeup doesn't necessarily mean that Microhoo is toast. Ballmer explains that acquiring Yahoo! would have been more a tactic than a strategy. It would have helped the company ramp up its search queries faster, but Microsoft "will get there with or without Yahoo!."
Ballmer would probably have left out the "with or" if the chance was nil that Mr. Softy might make another stab at Yahoo! at a lower price in a few months.
The moral of the story is that Microsoft is also hurt, even if it was the one to walk away from the table first. It is unlikely that Johnson's departure will create the massive wave of defections that we have seen at Yahoo! in recent weeks, but going by the rumble in Microsoft's belly, it appears that it left hungry too.
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