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Microsoft changes lineup at top

Microsoft has reshuffled its top executives, a move that strengthens its management structure for Net development and accounts for the loss of its top woman executive.

Microsoft (MSFT) is reshuffling its top executives for the second time this year to create a management structure that can meet the demands of accelerated Internet development.

Separately, Microsoft also announced today the departure of Patty Stonesifer, a senior vice president who was instrumental in getting Microsoft's interactive media operations off the ground earlier this year. The high-profile Stonesifer was the company's only top woman executive and one of the few female senior executives in the software industry.

The restructuring has spawned two new product groups: a platforms and applications unit that includes the company's core operating systems and productivity applications like Word and Excel, and a new group for interactive media, including Microsoft Network, MSNBC, multimedia games, and CD-ROM publishing, as well as Microsoft's hardware and desktop software division.

The software giant today also named Nathan Myhrvold to a newly created post of chief technology officer, a title that recognizes the role Myhrvold has been playing informally for a long time. Myhrvold, a physicist who has been with the company for ten years, will lead Microsoft's $2 billion annual research and development efforts and report directly to Chairman Bill Gates.

Stan Dolberg, director of software strategy for research firm Forrester Research, said this second restructuring of the year indicates that Microsoft has yet to consolidate a winning Internet team.

"Microsoft is having a hard time finding the leaders to take it onto the Internet. They seem to be putting more Internet-aware people in top positions," Dolberg said. However, he was surprised by Myhrvold's high-profile promotion because the Microsoft veteran was one of those who seemed to come around late to the promise of the Internet. "It's a little confusing to see him being elevated."

Group Vice President Paul Maritz will head the platforms and applications unit. He was already in charge of the company's platforms operation but will now add on productivity software. Richard Fade, vice president of the desktop applications division that tests and markets Microsoft Office applications for Windows and Apple Computer's Macintosh systems, will report to Maritz.

Pete Higgins, another Microsoft group vice president, will head up the interactive media division. Higgins had shared management responsibility for the former applications and content group with Myhrvold. He also picks up many of the responsibilities of Stonesifer, who is leaving to become a management consultant for clients including Hollywood's DreamWorks SKG. Stonesifer will leave at the end of the year after eight years with Microsoft, the company said.

Dolberg said that by adding productivity software like Word and Excel into Maritz's new platforms and applications group and bundling the company's new media offerings into a group headed by Higgins makes for a provocative Internet strategy.

"It fits together with their plans to pull all the products together and Internet-enable them," Dolberg said. "That is a very powerful idea."

Microsoft's last major reorganization was announced in March, when it created the Internet product and tools division headed by Senior Vice President Brad Silberberg. This group was charged with delivering all Internet tools, including Visual Basic Script, Merchant Server, Internet Studio, and Visual Basic.