Microsoft exec who led Yahoo bid leaving company

By Daisuke Wakabayashi

SEATTLE (Reuters) - Microsoft Corp (MSFT.O: Quote, Profile, Research, Stock Buzz) said on Wednesday that Kevin Johnson, who as president of Microsoft's largest business division spearheaded the company's pursuit of Yahoo Inc (YHOO.O: Quote, Profile, Research, Stock Buzz), is leaving the software maker.

Microsoft will undergo a reorganization, splitting the division that Johnson runs -- platforms and services -- into two groups, one focusing on the Windows operating system and the other on search and other online services.

Johnson's departure is the latest hurdle to a possible transaction between Yahoo and Microsoft, a few days after the Web company and investor Carl Icahn settled a looming proxy fight to force Yahoo to strike a deal with Microsoft.

A source briefed on the matter said Johnson will leave to become the chief executive at Juniper Networks Inc (JNPR.O: Quote, Profile, Research, Stock Buzz), which makes equipment for communications networks.

The departure of Johnson, who worked closely with Ballmer during its on-again, off-again negotiations with Yahoo, is another setback for Microsoft's online business, where the company is trailing Google Inc (GOOG.O: Quote, Profile, Research, Stock Buzz).

Three executives working in the Windows division will report directly to Ballmer, while the company said it will conduct an internal and external search to find a new head for its online services business.

The head of Microsoft's online advertising group and Web search operations will remain in place. The new structure will allow the online business to be more agile and more focused, Ballmer said in a news release.

The last few months were hectic for Johnson.