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ComputerWire: IT Industry Intelligence

Microsoft Corp is losing its president and COO, Rick Belluzzo, after one year on the job, in a reorganization which will see the firm's business groups assume greater accountability,

Kevin Murphy writes

.

Belluzzo, who will leave his position at the end of May and the company in September, said he intends to head his own company, although he gave no specific destination.

"Given where Steve [Ballmer, CEO] and I knew we needed to take the business, I decided it was the right time to pursue my goal of leading my own company," Belluzzo said in a statement issued after market close yesterday. Belluzzo took the COO's job in February 2001, taking over from Robert Herbold, who retired.

Microsoft does not appear to be replacing Belluzzo. Instead, the heads of each of the company's seven business groups will take "comprehensive operational and financial responsibility and greater accountability" for their units.

Above these leaders, Ballmer and his Senior Leadership Team will make sure the businesses cooperate. This team will face the challenge of ensuring the units, which focus on areas from consumer products to Windows to business productivity, work together without the risk of fragmenting the company.

Belluzzo, an alumnus of Silicon Graphics Inc, where he was CEO, and Hewlett-Packard Co, joined Microsoft in September 1999 as vice president of the company's consumer group. As COO, he continued to oversee Microsoft's shaky entrance into interactive TV and games console markets.

Both Microsoft TV software and XBox console have been having a hard time over the last year. Despite inking a number of major deals for its set-top box operating systems, Microsoft has suffered a number of iTV setbacks over the last two years, with deployments by major cable companies delayed, scaled back or scrapped.

The XBox, launched late last year, has also suffered from disappointing sales.

Last week, SoundView Technology Group Ltd said Microsoft was "significantly behind" its short-term estimates for sales in Europe and Japan. Cracking the Japanese market, where the world's leading games developers work, is a key goal for global acceptance of the XBox.

Microsoft will now focus on seven product groupings: Windows Client, Knowledge Worker, Server & Tools, Business Solutions, CE/Mobility, MSN and Home & Entertainment.

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