March 21, 2007 3:09 PM PDT

Microsoft shuffles more execs in ad unit

Microsoft announced Wednesday a further shake-up of its search and online advertising business.

The company said that Satya Nadella, who has been heading the Microsoft Dynamics product line, will head a newly formed engineering group responsible for both companywide search efforts as well as the company's ad-serving engine, AdCenter. Nadella will report to Kevin Johnson, the head of Microsoft's Platforms and Services Division.

Joining Nadella in the Search and Ad Platform Group is Harry Shum, who leads Microsoft Research Asia. Shum will continue in that role, but also add the title of chief scientist for the new group, responsible for coordinating short- and long-term research and development.

The moves follow the announcement that two other top executives--Christopher Payne and Blake Irving--are leaving Microsoft. Payne had been heading the search business, while Irving's unit included AdCenter.

Wednesday's announcement reflects the growing importance of search, said Adam Sohn, a director in Microsoft's Online Services unit.

"Search needs to show up in the right places across a whole set of software and services," Sohn said. "It is just a huge priority for the company."

The moves also demonstrate how Johnson, who runs Windows and Microsoft's online businesses, is putting his stamp on the Internet part of the business. Johnson has already made a number of moves in the Windows world, bringing in several executives from elsewhere in the company.

"This is Kevin shaking things up and tuning the organization," Sohn said.

Though Nadella comes from outside the MSN and Live services area, he has experience leading a far-flung development team, having headed things in the Microsoft Business Solutions unit, which had teams in North Dakota, Denmark and Redmond, Wash., among other locales. Nadella also once ran Microsoft's bCentral portal for small businesses.

"He's been thinking about the online service business for a long time," Sohn said.

Nadella will shift roles by April 19, with corporate Vice President Tami Reller serving as acting leader for the Dynamics unit, reporting to Business Division President Jeff Raikes.

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