Microsoft divides online business

Microsoft is splitting its online business into two groups. Windows Live is being hived off into its Windows division and its advertising and media assets, such as search and MSN, will be housed in a new division. The restructure comes as group head Kevin Johnson announces his departure.

Johnson, president of platforms and services business, is leaving to become chief executive of Juniper Networks, a maker of networking hardware. He is also a member of Microsoft’s leadership team and led the bid for rival Yahoo!.

Senior vice presidents Steven Sinofsky, Jon DeVaan and Bill Veghte will lead the new group, which will look after Windows and Windows Live. Microsoft is recruiting for a head of the online services group.

In the most recent quarter, revenue from online services grew by 24% to $838 million, but the division’s loss for the quarter more than doubled, to $488 million.

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