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Microsoft CEO Said to Give Bates Mergers Role in Revamp

Microsoft CEO Steve Ballmer
The restructuring isn’t finalized and Steve Ballmer, chief executive officer of Microsoft Corp., may still shuffle roles around up until it’s officially announced, the people said. Photographer: David Paul Morris/Bloomberg

July 3 (Bloomberg) -- Microsoft Corp. Chief Executive Officer Steve Ballmer is considering a reorganization that would put Skype president Tony Bates in charge of acquisitions and relationships with software developers, according to people familiar with the matter.

Ballmer may also give Windows chief Julie Larson-Green oversight of hardware engineering for the whole company, said one of the people, who asked not to be named because the plans are private. Ballmer is expected to reveal a reorganization as early as next week that aligns Microsoft’s business units around devices and services, the people said.

Microsoft, which is struggling to gain share in mobile phones and tablets, announced a shift in strategy last year for the world’s largest software maker to focus on computing devices and Internet-based services. Restructuring will concentrate units under these areas and also separate product engineering from business functions like marketing and finance, which will get their own groups.

The restructuring isn’t finalized and Ballmer may still shuffle roles around up until it’s officially announced, the people said. Xbox head Don Mattrick had been a contender for the hardware post before left the company to become CEO of Zynga Inc., a move announced July 1.

Under this scenario, Larson-Green would oversee hardware engineering for all devices, including Xbox gaming consoles and Surface tablets, one person said. Windows Phone software chief Terry Myerson would be given added responsibility for Windows operating system engineering under a group combining both businesses, the person said.

Cloud, Enterprise

Frank Shaw, a spokesman for Redmond, Washington-based Microsoft, declined to comment on new positions in the reorganization.

Satya Nadella, current head of the server business, would oversee a unit focused on cloud computing and products for corporate customers, one person said. Qi Lu, chief of the online group, would run an applications and services engineering unit comprised of online businesses such as the Bing search engine as well as Office and Skype engineering, the person said.

Within the broad business functions, Bates would lead strategy and business development and work to build relationships with software makers and partners who make hardware running Microsoft programs, two people said.

Tami Reller, who now leads Windows marketing, would oversee a marketing unit, one person said. The finance heads for each unit would report to Amy Hood, Microsoft’s chief financial officer, this person said. Previously the CFOs in each unit reported to the head of their respective divisions.

Any staffing changes will also provide clues as to the executives who may eventually succeed Ballmer.

Microsoft rose less than 1 percent to $34.01 at the close in New York. The stock has gained 27 percent this year, compared with a 13 percent advance for the Standard & Poor’s 500 Index.

To contact the reporters on this story: Dina Bass in Seattle at dbass2@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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