Microsoft, chastened by poor European sales of Internet products, has changed its senior management structure at the same time as seeking to raise extra money, in a share issue worth $750 million.
Bill Gates, chairman of Microsoft, has created a nine-member executive team that gives more prominence to Internet and Web applications.
Brad Silverberg and Jim Allchin, both senior vice presidents, are the newcomers to the top ranks of Microsoft, joining Steve Ballmer, Paul Maritz, Bob Herbold, Pete Higgins, Nathan Myhrvold, Jeff Raikes and Gates himself.
Silverberg will head up an applications and Internet client group, with effective control of clients, Web authoring, developer relations and the Net tools division. Allchin also changes his job title and will have responsibility for servers, including Internet servers.
The preferred share issue, worth $750 million, brings Microsoft?s paper capitalisation to around the $100 billion mark. The stock will be convertible to ordinary shares after a period of three years. Sources suggest that Microsoft is issuing the stock to fund further Internet growth. There have been persistent rumours over the past two months that the company has diverted its research and development funds from other areas in an attempt to catch up with the rapidly moving Internet industry.
Microsoft is concerned about a lack of PC sales in Europe, with managing director Bernard Vergnes worried that growth in the market is poor compared to that in the US. He said that sales in Europe only rose by eight per cent in the quarter ending 30 September, compared to a growth figure of 14 per cent in the US.
This is not the first time that senior executives have expressed their concern about European and UK growth. Two months ago, senior VP Steve Ballmer said he believed there were more dealers in the continent than the local offices had realised and exhorted his UK troops to recruit more channel partners.
* Microsoft also announced its future plans for SQL Server. The project, codenamed Sphinx, will aim to componentise the software, add dynamic locking to database rows, database self-management and replication. The move is widely seen as a reaction to Oracle and Informix plans.
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