MSN VP Steps Down

Baldwin Louie — Tue, 10 Apr 2001 15:00:00 -0700

ANALYSIS Microsoft announced an executive reorganization last week, restructuring some of its business units to forge ahead with its new drive to create a software platform for Web services. Undisclosed at the time was that Brad Chase, senior VP in charge of MSN, was stepping down.

An internal e-mail from CEO Steve Ballmer to employees said that Chase "wants to pursue some new challenges." Microsoft execs said Chase has not resigned from Microsoft, but that he will look for another role, perhaps within the company. "He's still thinking about that," said one exec who requested anonymity.

It should be noted, however, that this fuzzy disclosure fits a familiar pattern. Microsoft senior executives hardly ever announce an immediate resignation from the company. Typically, those execs intent on walking away take an extended leave of absence and never come back. By the time they announce six months to a year later that they are not returning, there is little sting left in the news.

A 13-year Microsoft veteran, Chase led the hugely successful marketing of Windows 95 and the Internet Explorer Web browser. After taking over MSN, he was passed over to lead the software giant's entire consumer division in favor of an outsider, Rick Belluzzo, now Microsoft's president and COO.

Undoubtedly, the fact that last week's reorganization to some extent reduces the prestige of the MSN group that Chase led was an element of his decision to step down. The focus of Microsoft's attention has swiveled toward providing a software platform for Web services, and while MSN will be an important user base for those services, a separate group led by Microsoft group VP Bob Muglia is building the back-end platform and infrastructure for the services initiative, code-named HailStorm. It's this core technology unit that has become the center of gravity for Microsoft's top talent.

In last week's reorganization, some elements that had been in Chase's division were switched to Muglia's. These include products — such as the Microsoft Money personal finance software and the Encarta encyclopedia — that have until now been sold chiefly as shrink-wrapped products but that already have strong online elements. The logic of shifting these products to Muglia's group is that they will be delivered as online services rather than packaged software. In addition, MSN Search, a key technology service that transcends MSN, also was switched to Muglia's unit.

Finally, the unit responsible for MSN Explorer, the recently released version of Microsoft's Web browser designed for MSN users, was shifted to group VP Jim Allchin's Windows group. That move ensures that all of Microsoft's browser work goes on in one place. It also confirms that the Department of Justice has not succeeded one iota in dissuading Microsoft from tying its Web browser to the operating system. "You want to make sure the Windows user has a great experience, whether in Windows or in MSN," is how the anonymous source spins it.

What's left in MSN is the content and programming sites such as MSNBC and shopping and games sites — and the building of the user network. MSN, according to Media Metrix now the No. 1 Internet portal worldwide and No. 2 behind AOL in the U.S., will remain an important showcase and launching pad for the upcoming HailStorm services. Yusuf Mehdi, 33, who has reported to Chase for many years, will now lead that effort.

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MSN VP Steps Down