The company plans to split the PSD into two groups: "Windows/Windows Live" and "Online Services." Those groups will report to Microsoft's CEO Steve Ballmer, according to an announcement issued by the company. Ballmer has appointed Senior Vice Presidents Jon DeVaan, Steven Sinofsky and Bill Veghte to lead the Windows/Windows Live group, "effective immediately."
Microsoft also plans to establish "a new senior lead position" in the Online Services Division and is currently searching for a candidate for the job.
Johnson will be leaving to become the CEO of Juniper Networks, according to the Wall Street Journal.
Johnson had overseen Microsoft's Windows and Online Services businesses, the latter of which centered on Live Search, MSN.com and Windows Live. He also had been involved in the company's overall strategy, reporting to Ballmer.
In early June, Johnson declared he would fix the rebranding of Microsoft's Live Search, with the aim of increasing Microsoft's competition with No. 1 online search player Google. That renewed focus on Microsoft's "organic" search development came after an unsolicited bid to acquire No. 2 Internet search firm Yahoo failed to materialize in April.
Johnson was also involved with Microsoft's software plus services strategy, in which he oversaw 30 acquisitions. The biggest of those was a $6 billion acquisition of aQuantive Inc., boosting Microsoft's digital advertising technologies.
Johnson also had a hand in overseeing the Windows Vista operating system launch, in which more than 180 million copies have been sold, according to Microsoft's fiscal fourth-quarter report, released on July 17.
Microsoft's 4Q report showed that its Online Services Division had a $1.23 billion operating loss for the fiscal year, which was largely associated with its competitive efforts to catch up with Google in online search advertising business.
Microsoft has defended its expenditures in search, with Chris Liddell, Microsoft's senior vice president and chief financial officer, saying the expenditures are necessary to address a market "measured in the tens of billions of dollars."
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