twitter's Journal: Big Leadership Shuffle Rocks M$

Kevin Johnson, president of Microsoft's Platforms and Services Division, is leaving the company and his departure is triggering a major reorganization. Steve Ballmer will now be directly responsible for Windows and their online services division will be left leaderless. The WSJ speculates the failed Yahoo bid has something to do with Johnson's departure.

The change comes in the wake of Microsoft's failed attempts to buy and then forge a partnership with Yahoo. Mr. Johnson was part of the small team of Microsoft executives that led the effort to bid for Yahoo in January. ... [Mr. Ballmer, grew frustrated with] Yahoo's unwillingness to sell and with his own executives.

CNN reports that M$'s PR is trying to calm investors.

concerns ... are increasingly reflected in Microsoft's stock price, which has dropped by around 25% so far this year. ... Analysts say Microsoft's most pressing challenge is to deliver results from its Online Services Business .... The company must also address the future of its core Windows and Office products. Microsoft's Vista operating system, the latest version of Windows, has had a lukewarm reception since its release two years ago. [many large companies are skipping it and fewer than 10% of all companies are using it.]

"With the latest version it seems that the upgrade cycle may have been a bridge too far for customers," James Whitehurst, chief executive of Linux software maker Red Hat Inc. (RHT), said about Vista.

Will this be the start of a big sell off? I don't think the guy who talks about "squirting" Zunes and brainwashing his kids is going to be able to pull either Vista or online services out of the fire. Others agree.

Update: Boycott Novel noticed this too and has been tracking the executive exodus for a long time.