In an effort to push decision-making farther down the organization, while at the same time keeping pace with fast-rising competitors such as Google, Microsoft Corp. has implemented a sweeping reorganization by forming three operating groups - down from seven - and naming a trio of senior executives to serve as president of each.Overseeing the Business Division - a meshing of Microsoft Business Solutions and the Information Worker unit - will be Jeff Raikes, the group vice president in charge of Office software.

Senior vice president Doug Burgum will continue to lead MBS, but will now report to Raikes within the division that will handle programs, servers and software for small and midsized businesses, including its recently launched Small Business Accounting product.

The Platform Products & Services Division, which comprises Windows Client Server and Tools and MSN, will be led by co-presidents James Allchin, who currently oversees the Windows group, and Kevin Johnson. Allchin, however, has announced that he will retire at the end of 2006, after Windows Vista - the next operating system from Microsoft - is released, leaving Johnson in sole charge. David Cole, senior vice president of MSN, will continue to lead MSN, but now reports to Johnson.

The Entertainment and Devices Division is a combination of the current Home and Entertainment and Mobile Phone Divisions. Robbie Bach, who is credited with driving the company's Xbox business, will serve as president, with mobile and embedded devices senior vice president Pieter Knook reporting to him.

Eric Rudder, senior vice president of the server and tools group, will now work directly under Microsoft chairman Bill Gates, after the launch of Visual Studio and SQL Server 2005 later this year. In addition, Ray Ozzie, the chief technical officer who joined Microsoft after his Groove Networks was acquired earlier this year, will be in charge of helping drive the company's software-based services strategy and execution across all three divisions. He reports directly to company chairman Bill Gates.

The restructuring comes at a time when the company has been criticized for a one-year delay in releasing Vista, it's latest operating system. The delay has caused a five-year gap between the release of Windows XP, the last operating system from Microsoft, and Vista - to date, the longest lag time in the history of Microsoft for releasing a new operating system.

Microsoft executives were not available for comment.

In a statement, chief executive Steve Ballmer said that the changes were "designed to align our business groups in a way that will enhance decision-making and speed of execution. We see a new era of opportunity to provide greater value to our customers by weaving both software and services into forms that suit their needs."

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