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Microsoft sets restructuring
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March 12, 1999: 11:30 a.m. ET
Company says changes coming in business units but won't disclose details
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NEW YORK (CNNfn) - Microsoft officials said Friday the company is continuing to develop plans for reorganizing its business units, but wouldn't reveal specific details or a date when those plans will be announced.
"They [company officials] are planning to make adjustments to internal structure but are not confirming dates or details," a Microsoft (MSFT) spokesman who asked to be unnamed told CNNfn. "The company has continues to make adjustments to company structure to focus on meeting customer needs."
The Wall Street Journal reported Friday that the software giant plans to announce a major internal reorganization of its business units next week with a management focus on its flagging Interactive Media Group.
In the aftermath of the report, Microsoft stock was down 3-5/8 Friday to 157-13/16.
Separately, shareholders approved an increase in the company's outstanding shares, paving the way for a two-for-one stock split.
Under the plan reported by the Journal, the company will split into four segments based around customer groups rather than product lines. These will cover consumer products, software development, applications and corporate sales.
The main driver of change has been the under-performing media group. Microsoft president Steve Ballmer rejected the idea of spinning off the network services group amid concern that its ability to prosper alone would be hamstrung by lingering antitrust issues, the Journal reported.
The group is likely to be renamed the consumer division, according to the newspaper. The unit had been led by Pete Higgins until his resignation last November.
Ballmer has been left to oversee operations after alleged problems in recruiting a successor.
The Journal reported that initial responsibility for the consumer group, which includes online network services, will be split between Microsoft Office chief Jon DeVaan and Brad Chase, who oversaw the launch of Windows 95 and Internet Explorer.
The newspaper said Paul Maritz, the technology chief viewed as the third force in the company after chairman Bill Gates and Ballmer, will take charge of the software group in a surprise move that sheds some of his executive responsibilities but allows him to concentrate on product development.
The corporate unit will be headed by senior vice-president Jim Allchin and rebranded as an enterprise group aimed at selling to chief information officers, the Journal reported. Allchin also will retain control of the launch of the Windows 2000 operating system. The applications group will be led by Robert Muglia, who also will be responsible for updating the Office site. 
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Microsoft
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