Now Kevin Johnson, the newest of the Microsoft beast's eight heads, has issued a decree to his entire organization. Johnson's memo to the Platforms and Services Division lays out his plan for MSN, Windows Live, and his other fiefdoms.

A source inside PSD leaked the missive — an introductory memo followed by an outline of the reorg. Johnson's main points:

Windows Vista + Windows Live = the future.
Windows Live — oh, and you too, MSN — will enjoy a growing online advertising industry.
"Our software + service approach and the expertise we have built in MSN can support innovation agility as we enable the Live era." In other words, "Thanks for training the next generation. Don't let the door hit you..."
Jim Allchin is still Johnson's co-president. He'll run the "dining with bloggers" department.

After the jump, the first part of Johnson's memo.

Earlier: MSN Meltdown: Senior VP David Cole forced out, Yusuf Mehdi is next [Valleywag]
And: MSN Meltdown: Michael Rawding quits [Valleywag]

Since taking on my new role last September, I've spent quite a bit of time focused on how best to position the Platforms and Services Division (PSD) for the future. I want to share with you some of that thinking and some new changes we are undertaking today.

We continue to see a strong wave of innovation from Microsoft making its way to market. PSD is a big part of this wave. The recent launches from our Server and Tools business, including SQL Server 2005, Visual Studio 2005, BizTalk 2006 and Windows Server R2, have been well received by customers and partners, and the team is now focused on Longhorn Server. The Windows client team continues to drive forward on Windows Vista with the latest CTP that was released in February. The MSN division continues to deliver new innovation such as Live Mail, Live Messenger, our constantly improving search offerings and many other Windows Live offerings. MSN itself has enabled new channels and content and continues to expand. All of these product and service releases are evidence of a strong wave of innovation and momentum in the market.

Over the last few months, I've made it a priority to listen to what's on people's minds. I have had the opportunity to conduct more than one hundred 1:1's and have met with over 2,000 of you at all-hands meetings and roundtables. Not surprisingly some common themes have emerged. Your questions, concerns and feedback, taken together with the dialogue within our leadership team pointed to the need to address three key questions for our division:

* What are the next steps for advancing our vision of software + services?
* Are there growth opportunities upon which we should be more focused?
* How can we be more agile?

As our current product pipeline hits the market, it's a good time to lay the foundation for the future of PSD. I have been working with Jim Allchin and other PSD leaders to establish an organization that positions us for the future. This has been a very collaborative process and we have considered many options. The PSD organization changes we are announcing today are driven by the following objectives which are rooted in the input I've received from so many of you:

1. Software + Services: Position for the next wave of innovation relative to our vision for Windows Live. Ray Ozzie and I continue to work closely to advance the Live vision announced last November. End-to-end scenarios that enable seamless experiences across client, server, and services are critical for all customers, and Windows Vista + Windows Live begins to address this vision. Utilizing services as a distribution vehicle for user experiences enables us to embrace the concept of software + service and deliver innovation to market faster. Doing this requires us to think about the Windows Live platform as a key to the value proposition we deliver to developers. These changes provide clear connections with Ray and his team to help shape the Live platform, Live experiences and the marketing that supports Windows Live.

2. Growth: Focus on the key growth opportunities ahead of us, specifically online advertising, emerging markets, and enterprise computing infrastructure. Our Server & Tools business has shown strong growth over the last few years, and has great opportunities to continue that momentum. Windows Client has growth opportunities in premium offerings, new solutions for emerging markets, and in reducing unlicensed PCs. Certainly the upcoming launch of Windows Vista will spark a new wave of growth across our broader industry and partner ecosystem. Analysts predict the online advertising industry will grow to $35B+ by 2008 which creates opportunity for our MSN and Windows Live businesses.

3. Agility: Lay the foundation for accelerating our pace of innovation, including focusing on ways to improve clarity of decision making, drive greater accountability, and reduce layers in the organization so we can move faster. It also means utilizing existing expertise within the division to embrace services — and rapid release cycles that services can enable — to all aspects of our business. Our software + service approach and the expertise we have built in MSN can support innovation agility as we enable the Live era.

As part of the next step of Jim's transition, we discussed when it was appropriate to move his direct reports to me, and decided that this organization change was the right time. Jim's overall partnership role with me in running PSD will not be changing.

The PSD leadership team I've put in place to align against these key objectives includes:

Steven Sinofsky , SVP Engineering, Windows and Windows Live Group
Brian Valentine , SVP COSD
Blake Irving , CVP, Windows Live Platform Group
David Cole , SVP, Online Business Group
Yusuf Mehdi, SVP, Chief Advertising Strategist
Mike Sievert , CVP Windows Client Marketing
Will Poole , SVP Market Expansion Group
Bob Muglia , SVP Server and Tools Business Group
Sanjay Parthasarathy , CVP Developer and Platform Evangelism
Brent Callinicos , CFO and CVP Finance Group
Rick Thompson, CVP supporting a special assignment
Darryn Dieken , Technical Assistant
Brian "Skip" Schipper, GM Human Resources
Mary Snapp , CVP and Deputy General Counsel, Legal and Corporate Affairs

I know change is never easy but I truly appreciate the focus that people throughout PSD have on innovation and the wave of products and services our team is delivering to the marketplace is impressive. These changes are intended to help us increase our agility, embrace the concept of software + services, and position us for an exciting future together.

Let's continue to impress customers and partners with our innovation, and drive satisfaction to levels we've never achieved before. Let's also stay focused on our priorities as we make this transition and align our organization for the future.

For those of you who will be on campus in Redmond on Friday, March 24, I hope you can join me in person, in B33/McKinley Room, from 10:00 11:00am. The meeting will start promptly at 10:00 a.m., so please plan on arriving a few minutes early to ensure you get a seat.

I hope everyone else will watch the webcast, which will be streamed live on the intranet and archived there for later viewing.

Whether you attend in person or via the Net, y ou can submit your questions to [redacted]@microsoft.com before the meeting begins.

Thank you for your contribution and your continued focus on innovation and our customers.

Kevin

And more execs are getting the chop soon, says LiveSide. Oh well, for Microsoft to switch its online presence to Live, someone's gotta go. Let's just hope the other exiled execs temper their "I love you all and I wasn't forced out" memos — I'm still drying my eyes after David Cole's.

Life after Cole - Another MSN Exec leaves [LiveSide]
Earlier: MSN Meltdown: Senior VP David Cole forced out, Yusuf Mehdi is next [Valleywag]

Last year, Microsoft exec Kevin Johnson was promoted to co-president, with MSN as one of his fiefdoms. Johnson asked about Cole and heard he wasn't too hot. Now he's ushered him out. But Johnson gave Cole time to gather his wits and spin his "leave of absence" as a "personal decision." From Cole's internal memo to MSN:

Did Kevin or Steve ask me to leave? No. Both Kevin and Steve made it clear they prefer that I stay in a leadership role in MSN. My Leave of Absence is a personal decision I made on my own.

In other words, "You don't have to go home, but you can't stay here."

Cole, far left, on stage with Bill Gates at a presentation of Windows Live this November. The end is near. [Source]

More analysis and the full memo after the jump.

Reading the memo is a bit sad, thanks to the obvious pains Cole takes to put a brave face on all this.

Have I lost confidence in MSN's ability to win? Ha! Not even close. While our progress in the market doesn't completely show it yet, I feel strongly that our strategy, our investments, and our leadership is on track to get us to a winning market position.

Maybe he really believes it, or maybe even he knows that the future is Live. Someone ought to hold Cole and say "It's okay, David. You tried." After all, no one wants to head up a dying web brand.

Incidentally, there's one big question now. Who will Johnson pick to replace Cole? With Windows Live set to take over Microsoft's online presence, no one wants to get left holding the hot potato.

One exec doesn't have to worry. Yusuf Mehdi, in charge of Information Services under Cole, is expected to soon take his own Johnson-forced "sabbatical."

Mehdi presents MSN 8.0 in 2002. Is Bill already planning MSN's doom? [Source]

Below, the memo:

From: David Cole
Sent: Friday, February 17, 2006 9:02 AM
To: MSN & Personal Services (WW FTE's Only)
Cc: Executive Staff
Subject: David Cole

I want to let you know about a personal decision I ve made to take some time off.

To begin, I want to stress how strongly I believe in what we are doing here in MSN, and what the company is doing overall. These are exciting times for Microsoft and the MSN team. I m thrilled about our Windows Live strategy and progress, and how we are investing in MSN.com. The progress we are making across the business is truly amazing and I am so very proud of all that our team has accomplished. We are competing hard in what I believe is the most exciting segment in the technology industry. We re investing heavily to win, we've got a strong set of leaders, we've got the right strategy, and the company is backing us to win while transforming itself to become a leading software services provider to all customers. And I want to point out explicitly that I believe in our alignment with the Windows team under Kevin's leadership of PSD.

But after nearly 20 years at Microsoft, including 6+ years in the MSN division, I have decided to take some down time. I won't be going anywhere right away and I m committed to continue leading the division to help Kevin develop a solid transition plan. I expect to stay on through April, at which point I'll take a 1-year Leave of Absence. During my remaining time on the job, I'll make sure our strategy is clear, that we are invested at levels to win, that we are off to a good start on FY07 planning, and that there is a good leadership transition.

Obviously, this is not a decision I am making lightly. I love to work, interact with smart people, and have an impact. But during the past 18 months, I've been contemplating what to do with the second half of my career and I've been so busy that I still don't have the answer. Taking this leave will give me the time needed to recharge and figure out what is next for me. My initial plan is to spend more time with my family (whether they like it or not), catch up on personal projects, recreate a lot more in the outdoors, and do other recharging-type activities. I also will take time to explore the breadth of what the world has to offer and decide on the type of work I want to commit myself to for the next 10, 15, or 20 years.

As I think back over the past 20 years, I can still vividly remember my first job in Product Support in 1986 when I was answering phone calls from customers. That was an incredible starting point for me as I learned from the customer point of view. From there, I had the opportunity to participate and lead aspects of some world-changing projects like Windows 3.0, Windows 3.1, Windows 95, Internet Explorer, Windows CE, and now MSN and Windows Live. Throughout that time, I've had the privilege of working with an incredible number of smart and talented people. It's been a complete thrill ride that s allowed me to continually pursue my passion. The support I've gotten from all across the company — at all levels — has been astounding.

I m sure there will be some speculation about why I m taking a break now I have a great job at an amazingly exciting time in the company s history. And since I know this might not make immediate sense to some, I want to directly address a few of the obvious speculations head on:

Did Kevin or Steve ask me to leave? No. Both Kevin and Steve made it clear they prefer that I stay in a leadership role in MSN. My Leave of Absence is a personal decision I made on my own.

Do I not like being part of PSD or Kevin's org? Quite the opposite is true. I can take some credit for helping get the MSN organization aligned more closely with the Windows organization to execute on our Windows Live strategy. Kevin is a tremendous leader and I have great respect for him. We re poised for success and if this were a different point in my career, I would absolutely be staying.

Have I lost confidence in MSN's ability to win? Ha! Not even close. While our progress in the market doesn't completely show it yet, I feel strongly that our strategy, our investments, and our leadership is on track to get us to a winning market position. It's a matter of timing and execution. I definitely would not be taking a break if I thought things were headed in the wrong direction — that s not my style. I m choosing to take a break precisely because we are headed in the right direction with great momentum.

There is never a good time for a transition like this to happen. But I feel that the division is in really good shape from a strategy, leadership, and investment level point of view. We just need to go get it done, and that is happening across the division at all levels. I will be working closely with Kevin to figure out the transition plan for new leadership and until that plan is announced, you can count on me through April as you always have.

To close, I want to thank all of you for your ideas, your support and your hard work in MSN. We ve made incredible progress and I want to encourage you to keep innovating, growing the business, and satisfying customers. There is an exciting future ahead with Windows Live and MSN, and I know I will hear and read great things about this group as the year unfolds.

Keep up the great work!

David

Comments, rebuttals, analysis, and educated predictions are, as always, welcome. E-mail tips@valleywag.com.

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