Microsoft's (MSFT) Internet Gladiator Leaves The Arena As The Company Fights On

MsnAt most companies, if the head of a major division which has been under pressure leaves the firm, it is considered bad news. Microsoft (MSFT) is probably an exception.

According to The Wall Street Journal, “Kevin Johnson, the head of Microsoft’s online business who led the company’s bid to buy Yahoo, is leaving the software giant to run Juniper Networks (JNPR).” The tremendous operation he would run if Yahoo! had become part of the company will probably never exist. With most hope for a new kingdom gone, Johnson elected to become CEO of a much smaller company.

Whatever the market thinks of Microsoft, and its share prices says that is not much, the world’s largest software company has an innate stubbornness which has often not served it well. There have been exceptions. Redmond fought long odds to take the video game business from market leader Sony (SNE), and it did so in a relatively brief period of less than five years.

Google (GOOG), the firm Microsoft must match to have hope of being an important presence on the internet, has shown that it is a least the tiniest bit vulnerable. It is no longer growing at 50% or 60% a year. It has entered a number of new businesses including YouTube which have not been great successes.

The conventional wisdom is that Microsoft cannot close the divide between itself and Google. That is almost certainly true. But, as Google begins to reach the limits of its own period of hyper-growth and Microsoft continues to spend billions of dollars to improve its position on the internet, the game has not ended.

As Google faces more distractions, Microsoft gets more focused.

Douglas A. McIntyre

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