Microsoft (NASDAQ: MSFT) is sick of losing money at its online unit. It has replaced the head of the operation, Steve Berkowitz, with the head of the aQuantive ad company that the software company bought last year. Brian McAndrews will take over all responsibilities for the unit as it prepares to possibly merge with Yahoo! (NASDAQ: YHOO).

According to Reuters, "McAndrews will likely be in a top leadership position in the combined Microsoft-Yahoo, should the Web pioneer accept Microsoft's $41.8 billion buyout offer."

It is telling that an ad executive, who did not begin his career in Redmond, will take over. Microsoft hopes that an outsider may win over employees from Yahoo! if that deal goes though. There is bitterness between Yahoo! and current Microsoft staff after years of fighting one another.

But that action could be short-sighted. Programmers and management from within Microsoft's online operation may feel that Yahoo! is being treated with kid gloves. The executives and programmers at Microsoft's unit have spent years trying to turn it around.

Now they get to play second fiddle.

Douglas A. McIntyre is an editor at 247wallst.com.

Microsoft (MSFT) picks new team to run online unit originally appeared on BloggingStocks on Fri, 15 Feb 2008 10:10:00 EST. Please see our terms for use of feeds.

Microsoft Corp. (NASDAQ: MSFT) has its own answer to the Yahoo! Inc. (NASDAQ: YHOO) purchase of ad auction business Right Media and Google Inc.'s (NASDAQ: GOOG) acquisition of ad serving giant Doubleclick. The world's largest software company is going after a different platform -- the cell phone.

Microsoft today announced that it is buying ScreenTonic. The Paris-based company places and manages ads on wireless handsets. As the market for placing and brokering ads on the PC-based Internet gets more crowded, Microsoft is probably smart to look to the next platform that could see rapid ad growth.

The software company told Reuters: "The acquisition of ScreenTonic will be part of our long-term strategy to deliver ad experiences that map to the (mobile Internet)," said Steve Berkowitz, senior vice president at Microsoft's online services group.

Microsoft efforts to build a web presence with MSN and a search platform have been an embarrassing failure. MSFT's search share runs around 12%, about half Yahoo!'s. There are still rumors that the company could buy 24/7 RealMedia (NASDAQ: TFSM) to get into the mainstream ad brokerage business.

But with Google owning the search market, and Doubleclick being in second place, at best, it may not suit Microsoft. So it may be on to greener pastures.

Microsoft buys ScreenTonic for mobile ads originally appeared on BloggingStocks on Thu, 03 May 2007 10:00:00 EST. Please see our terms for use of feeds.