Microsoft VP: Company Focusing on Online Services, Advertising

by , 9:55 AM EDT, May 19th, 2008

It's no secret that Microsoft is gunning for more of the Internet search advertising and online services market, and vice president of the Platforms & Services Division, Kevin Johnson, has a plan for keeping the company focused on that goal. In a memo to employees, he outlined Microsoft's plans that include "innovate and disrupt in search," and "reinvent portal and social media experiences," according to AllThingsD.

Mr. Johnson's other goals include "consolidate ad platform and win in display," and "deliver end-to-end user experiences across PC, phone, and Web."

He acknowledged Microsoft's renewed negotiations with Yahoo and added "Regardless of the outcome of any new discussions, it is important that we continue to move forward to strengthen our online services business. The fact is that we are not where we want to be in this business yet and we've been in this position longer than we'd all like."

So far, Microsoft has been trailing far behind Google in the online search advertising market. The Redmond company's failed Yahoo buyout attempt was a move to bolster its own position against Google, and by returning to the negotiating table it hopes to gain some of the tools it needs to go up against the Internet search giant.

The new deal Microsoft is pushing for would have Yahoo selling off parts of the company, although Microsoft has not said which parts it is hoping to score.

Since Mr. Johnson's strategy includes consolidating ad platforms and "reinventing" social media experiences, Microsoft's likely targets include Yahoo's search services and even Facebook -- which could essentially strip the foundation out from under Yahoo.

Yahoo is now in an awkward position since it is facing the possibility of being neutered by Microsoft, or a hostile takeover attempt by billionaire investor Carl Icahn. Mr. Icahn has mounted a proxy battle to take over Yahoo's board in hopes of enticing Microsoft into renewing its full buyout offer.

Mr. Johnson added that Microsoft will be making some announcements about its Internet strategies over the next few days, which may shed more light on its plans for Yahoo. For now it looks like Microsoft is happy to try forcing Yahoo's hand by leveraging Mr. Icahn's hostile takeover move.