• D: All Things Digital, Friday, July 25, 2008 10:48 AM

Who will take over for Kevin Johnson as head of Microsoft's online services division? Kara Swisher says there's a movement brewing inside Redmond to give that job to Chief Software Architect Ray Ozzie, who has been credited for coming up with Microsoft's vision of providing "software plus services" via the Web. Why move Ozzie to online services? As Swisher says, some inside Microsoft think there's "no bigger puzzle ... to finally solve now than to figure out how to finally succeed in the online space."

Indeed, online services cost Microsoft $1.2 billion in the past fiscal year, double the impact of 2007, with steadily rising costs quarter over quarter. This is pretty deplorable, considering that Google and Yahoo continue to show steady growth. Because of its poor record, many think Microsoft ought to put Ozzie in charge.

"We need a real star to shake up the status quo," one Microsoft employee tells Swisher. "Ballmer has to put someone who can command the attention and respect of all the parts of Microsoft, who just can't seem to get it together in our online business." The question is, does Ballmer want to put Ozzie "in such a grinding and potentially thankless job"?

Read the whole story at D: All Things Digital »