Yahoo failure sends Microsoft into a spin

While it's clear Yahoo's board has been having a tough time of late, it's interesting to note that the strain is telling on Microsoft too. Yesterday it announced a wide-reaching reorganisation and the exit of Kevin Johnson, who oversaw the repeated, failed attempts to acquire Yahoo - or some parts of Yahoo.

Johnson has been with Microsoft for 16 years and was one of three divisional chiefs reporting to CEO Steve Ballmer. As well as leading the Yahoo negotiations, he was also responsible for the launch of Windows Vista, which is widely regarded as a marketing disaster.

The Financial Times reported that customers have been slow to upgrade from Windows XP to Vista and Microsoft's online business is loss-making, which was why the Yahoo deal was so important.

Johnson's Platform and Services division will now be separated into two units, according to Microsoft's statement. The two will be Windows and Windows Live, and Online Services. However, exactly how the reorganisation will address these two fundamental issues is not clear.

It is rumoured that Johnson had become deeply frustrated and will join Juniper Networks as COO, having worked a short hand-over period at Microsoft.

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