Go Daddy, the world’s biggest Web hosting and domain registration company, has hired former Yahoo Chief Product Officer and Microsoft exec Blake Irving to be its new CEO.

The privately-held Scottsdale, Ariz.-based company said Irving would start his new job on January 7 and will also join its board of directors. He is replacing Kohlberg Kravis Roberts’ Scott Wagner, who served as interim CEO since the summer, after Warren Adelman stepped down after only eight months on the job.

Private equity firm KKR is a major investor in Go Daddy, along with Silver Lake. The pair, as well as Technology Crossover Ventures, purchased a major stake in the company for $2.3 billion in a leveraged buyout in 2011. Go Daddy Executive Chairman and founder Bob Parsons — well known for being outspoken — also still holds a large percentage.

Go Daddy — which had sales of $1.3 billion in 2012 from fees from a wide variety of services offered to 11 million small business customers — is the largest registrar of Web sites, managing 54 million domains and hosting more than 5 million accounts. But it has been expanding the suite of services it offers.

“Go Daddy is an on-ramp for small business and I view it as a platform at tremendous scale for them,” said Irving in an interview yesterday, who noted he had 45 domains at Go Daddy himself. “There is a real vision here at further combining all these capabilities and opportunities here in the U.S. and internationally.”

For example, Go Daddy said that it recently bought Outright.com, a cloud-based financial management app, and also launched a mobile Web site-building tool.

Irving, as well as Wagner, underscored the global opportunities he intended to focus on. “If we move quickly, we can manage these opportunities into a bigger juggernaut,” he said, noting companies like Google, Intuit and others were also seeking to expand.

Currently, said Wagner, about one-third of customers added are internationally based and the business is about 25 percent of revenue, although most of the 3,400 Go Daddy employees are based in Arizona.

Go Daddy is not without its controversies — it has gotten dinged in recent years for its racy advertisements featuring scantily-clad women and also its support of the Stop Online Piracy Act (SOPA), which it later pulled.

Irving was a longtime Microsoft exec, including heading its Windows Live platform. Most recently he served as Chief Product Officer at Yahoo, before resigning earlier this year under the regime of now-ousted CEO Scott Thompson. He is a graduate of San Diego State and got his MBA degree from Pepperdine University.

One of the main things that Wall Street analysts had been watching for in the first-quarter earnings for Microsoft today was how its current flagship Windows software business was doing in the lead-up to the release of Windows 8 on October 26.

A little cracked, as it turns out.

Investors had expected that the Redmond, Wash., software giant’s first-quarter earnings would be $16.4 billion, compared to $17.4 billion last year, and that earnings would drop to 56 cents from 68 cents.

Instead, Microsoft turned in quarterly revenue of $16.01 billion and earnings of 53 cents a share.

One big culprit was a decline in sales of Windows, which was impacted by the company’s deferral of revenue related to Windows 8.

Microsoft is making a big bet that the new operating system — a drastic change from previous versions — will boost sales of PC and other mobile devices, especially tablets. The once-dominant company is seeing big challenges from consumer interest in products that do not use Windows, especially from Apple and Google.

Thus, it is now wait and see, which made investors nervous. Microsoft’s stock was down over 3 percent in after-hours trading, to $28.58.

That’s no surprise given the news.

Said Microsoft:

“The Windows & Windows Live Division posted revenue of $3.24 billion, a 33% decrease from the prior year period. Adjusting for the impact of the Windows Upgrade Offer and pre-sales of Windows 8 to OEMs prior to general availability, Windows division non-GAAP revenue declined 9% for the first quarter.”

Windows had already seen a decline in sales of the key product, which was down nearly 13 percent in the last quarter.

Other divisions had mixed revenue results: Servers & Tools was up eight percent, the Business division had a two percent decline, the Online Services unit saw a nine percent rise and the Entertainment and Devices division was down one percent.

Here’s the full Q1 press release, as well as Microsoft’s financial statement and pretty slides (and I threw in the 10-Q for good measure). The company will have an earnings call at 2:30 pm PT about the results:

PressReleaseFY13Q1

FinancialStatementFY13Q1

SlidesFY13Q1

MSFT_FY13Q1_10Q

For instance, with Project Origami, it was Microsoft — not Apple — that presaged the coming of a cheap, touch-centric tablet with all-day battery life. But, as we all know, the iPad hails from Cupertino, not Redmond.

With last week’s announcement of iCloud, we may be on the verge of seeing history repeat itself.

For years, Microsoft, under Ray Ozzie, has been on about the opportunity of merging software with the cloud. In particular, Ozzie’s team laid the groundwork for Live Mesh, a software service designed to keep documents in sync, in the cloud and on devices.

But after a quick start out of the gate when it was launched back in 2008, Mesh has been at best running in place for the past several years. It has gone through name changes, feature changes and switched places in the Microsoft organization. Yet, it remains limited by its caveats and complexity.

While Google touted its cloud-only approach with Docs and Microsoft allowed Mesh to stagnate, Apple flew largely under the radar. It took baby steps of its own, mainly with a little-known product called iDisk that allowed documents to be saved to the cloud. Like Mesh, it was limited and cumbersome. But Apple has clearly learned from its mistakes.

Has Microsoft?

To be fair, we don’t totally know the answer to this. There are indications that there will be greater cloud integration in the upcoming Mango version of Windows Phone and little is known of Windows 8, beyond ARM chip support and the new interface shown at D9.

What we do know is what Apple is pledging to deliver this fall: a service that synchronizes all one’s documents, wherever they are saved and on PCs, Macs and mobile devices — at least the mobile ones with an Apple logo. By contrast, Microsoft’s Mesh remains a work in progress, and one where users still have to actively decide which files and folders they want to keep in sync.

With only a week to go before the ninth D: All Things Digital conference debuts in California, we’re announcing the addition of Microsoft’s Steven Sinofsky to an already heavy-duty line-up of speakers.

One of the five Microsoft presidents–it’s kind of like the kingdoms in HBO’s “Game of Thrones,” but without big, clangy swords–he runs the flagship Windows and Windows Live division.

More importantly, Sinofsky is the guy who overhauled Office and then led the team that bailed Microsoft out of the Vista debacle.

The longtime company veteran–who joined Microsoft in 1989 as a software design engineer–will talk about the future of Windows in the era of all kinds of new devices and the cloud.

If you want to get some insight into his thinking, Sinofsky also wrote a book about the making of Windows 7–titled “One Strategy: Organization, Planning, and Decision Making”–that’s a very compelling read well beyond management wonk types.

We expect Sinofsky to be just as interesting onstage at D9 too, along with other top tech and media speakers including Google’s Eric Schmidt, Bob Iger of Disney, Silicon Valley legend Marc Andreessen, Netflix’s Reed Hastings and more.

The Wall Street Journal reported earlier tonight that Microsoft–in what would be its most aggressive acquisition in the digital space–was zeroing in on buying Skype for $8.5 billion all in with an assumption of the Luxembourg-based company’s debt.

Sources told BoomTown tonight that the deal for the online telephony and video communications giant is actually done and will be announced early tomorrow morning.

The purchase–which has been spearheaded in closely held negotiations by Microsoft CEO Steve Ballmer, with an assist from Business Division CFO Amy Hood and top dealmaker Charles Songhurst–is a bold move for the software giant and its biggest acquisition in more than three decades.

The big price will give Microsoft–which has struggled in its online efforts and has lost billions of dollars for its work–a big brand name on the Web.

With Skype, which has been aggressively expanding, Microsoft will continue to lose money in its Internet efforts. Skype lost $7 million on revenue of $860 million. Operating profits, which Skype preferred to highlight, were $264 million.

And–let us not forget–Skype’s debt is $686 million. Silver lining: That’s slightly less than Microsoft’s Online Services division losses in its most recent quarter!

But, sources said, the concept is bigger than just money, including getting access to Skype’s 663 million registered users.

Skype, which had been headed bumpily toward an IPO until now, will apparently be integrated into Microsoft’s Windows Live and other online communications efforts in both the consumer and enterprise arenas, sources said.

Think Kinect connecting.

Skype has had a big-company owner before–eBay Inc. paid $2.6 billion in cash and stock for it in 2005, as a way for the auction site’s buyers and sellers to communicate.

A 70 percent stake in Skype was sold in 2009 to investors such as Silver Lake Partners, Andreessen Horowitz, and the Canada Pension Plan Investment Board. It then valued Skype at $2.75 billion.

So, obviously, the deal is a big win for them. In addition, at the time they made their investments, Skype was a huge legal mess with lawsuits flying.

Skype has since gotten cleaned up enough to attract Microsoft.

Other suitors have looked at Skype, including Google, although acquisition interest by Facebook was very much overblown, said several sources.

Interestingly, Microsoft’s new smartphone partner Nokia also held meetings with Skype’s CEO Tony Bates, a former Cisco exec who arrived at the company last fall.

Interest in Skype by Microsoft was first reported by GigaOm’s Om Malik on Sunday.

Tune in at 5 am PT for the official press release, apparently, and lots and lots and lots of analysis of whether Microsoft paid too much for Skype.

Software giant Microsoft soundly beat Wall Street expectations in its third-quarter earnings released after the market closed today.

Microsoft said it had revenue of $16.43 billion for the quarter ended Mar. 31, 2011, which was up 13 percent from a year ago. Net income was $5.23 billion, or 61 cents per share, a rise of 31 percent and 36 percent, respectively.

Investors were expecting the Redmond, Wash. tech company to have profits of 56 cents per share, up 45 cents per share in the same quarter last year. Revenue was expected to come in at $16.2 billion.

As usual, Microsoft beating of expectations still has not helped its lackluster stock, which is down almost 14 percent year over year.

Its shares are currently down more than two percent in after-hours trading, to $26.09.

That’s due to worries about PC market growth, in the wake of an explosion of tablet and smartphone devices from competitors such as Apple and Google.

Most of Microsoft’s divisions were up in terms of revenue, especially its Xbox, Kinect and Office businesses. That offsetted slowing PC growth, Microsoft said, as well as a 4.5 percent drop in revenue in its flagship Windows and Windows Live division.

BoomTown will be liveblogging the earnings call at 2:30 pm PT.

Until then, here is the official press release:

letterheadFY11Q3 –

Microsoft’s legal eagle Brad Smith didn’t even bother to pretend the software giant’s filing of a formal antitrust complaint against Google with the European Commission wasn’t a wee bit ironic.

Wrote Smith in a blog post late last night:

“There of course will be some who will point out the irony in today’s filing. Having spent more than a decade wearing the shoe on the other foot with the European Commission, the filing of a formal antitrust complaint is not something we take lightly. This is the first time Microsoft Corporation has ever taken this step.”

But take it the company did, noting: “Microsoft is filing a formal complaint with the European Commission as part of the Commission’s ongoing investigation into whether Google has violated European competition law.”

Google, no surprise, disagreed, via a statement from a spokesman.

“We’re not surprised that Microsoft has done this, since one of their subsidiaries was one of the original complainants. For our part, we continue to discuss the case with the European Commission and we’re happy to explain to anyone how our business works.”

Here is the whole Microsoft post, in which Smith outlines Microsoft reasons for its action:

Adding our Voice to Concerns about Search in Europe

30 Mar 2011 9:00 PM

Posted by Brad Smith

Senior Vice President & General Counsel, Microsoft Corporation

Microsoft is filing a formal complaint with the European Commission as part of the Commission’s ongoing investigation into whether Google has violated European competition law. We thought it important to be transparent and provide some information on what we’re doing and why.

At the outset, we should be among the first to compliment Google for its genuine innovations, of which there have been many over the past decade. As the only viable search competitor to Google in the U.S. and much of Europe, we respect their engineering prowess and competitive drive. Google has done much to advance its laudable mission to “organize the world’s information,” but we’re concerned by a broadening pattern of conduct aimed at stopping anyone else from creating a competitive alternative.

We’ve therefore decided to join a large and growing number of companies registering their concerns about the European search market. By the European Commission’s own reckoning, Google has about 95 percent of the search market in Europe. This contrasts with the United States, where Microsoft serves about a quarter of Americans’ search needs either directly through Bing or through our partnership with Yahoo!.

At Microsoft we’ve shown that we’re prepared to work hard and invest literally billions of dollars annually to offer Bing, a search service that many now regard as the most innovative available. But, hard work and innovation need a fair and competitive marketplace in which to thrive, and twice the Department of Justice has intervened to thwart Google’s unlawful conduct from impeding fair competition. In 2008 the DOJ moved to file suit against Google for its unlawful attempt to tie up and set search advertising prices at Yahoo!, causing Google to back down. And last year the DOJ formally objected to Google’s efforts to monopolize book content, a position affirmed by a federal district court in New York just last week. Unfortunately, even this has not stopped the spread by Google of new and disconcerting practices in the United States.

As troubling as the situation is in United States, it is worse in Europe. That is why our filing today focuses on a pattern of actions that Google has taken to entrench its dominance in the markets for online search and search advertising to the detriment of European consumers.

How does it do this? Google has built its business on indexing and displaying snippets of other organizations’ Web content. It understands as well as anyone that search engines depend upon the openness of the Web in order to function properly, and it’s quick to complain when others undermine this. Unfortunately, Google has engaged in a broadening pattern of walling off access to content and data that competitors need to provide search results to consumers and to attract advertisers.

On PCs it is usually not difficult for people to navigate to any search engine. Google in fact makes this point virtually every time someone raises antitrust concerns about their practices. Their defense ignores the hugely important fact that there are many other important ways that search services compete. Search engines compete to index the Web as fully as possible so they can generate good search results, they compete to gain advertisers (the source of revenue in this business), and they compete to gain distribution of their search boxes through Web sites. Consumers will not benefit from clicking to alternative sites unless all search engines have a fair opportunity to compete in each of these areas.

Our filing details many instances where Google is impeding competition in these areas. A half-dozen examples below help illustrate some of our concerns.

First, in 2006 Google acquired YouTube–and since then it has put in place a growing number of technical measures to restrict competing search engines from properly accessing it for their search results. Without proper access to YouTube, Bing and other search engines cannot stand with Google on an equal footing in returning search results with links to YouTube videos and that, of course, drives more users away from competitors and to Google.

Second, in 2010 and again more recently, Google blocked Microsoft’s new Windows Phones from operating properly with YouTube. Google has enabled its own Android phones to access YouTube so that users can search for video categories, find favorites, see ratings, and so forth in the rich user interfaces offered by those phones. It’s done the same thing for the iPhones offered by Apple, which doesn’t offer a competing search service.

Unfortunately, Google has refused to allow Microsoft’s new Windows Phones to access this YouTube metadata in the same way that Android phones and iPhones do. As a result, Microsoft’s YouTube “app” on Windows Phones is basically just a browser displaying YouTube’s mobile Web site, without the rich functionality offered on competing phones. Microsoft is ready to release a high quality YouTube app for Windows Phone. We just need permission to access YouTube in the way that other phones already do, permission Google has refused to provide.

Third, Google is seeking to block access to content owned by book publishers. This was underscored in federal court in New York last week, in the decision involving Google’s effort to obtain exclusive and unfettered access to the large volume of so-called “orphan books–books for which no copyright holder can readily be found. Under Google’s plan only its search engine would be able to return search results from these books. As the federal court said in rejecting this plan, “Google’s ability to deny competitors the ability to search orphan books would further entrench Google’s market power in the online search market.” This is an important initial step under U.S. law, but it needs to be reinforced by similar positions in Europe and the rest of the world.

Fourth, Google is even restricting its customers’–namely, advertisers’–access to their own data. Advertisers input large amounts of data into Google’s ad servers in the course of managing their advertising campaigns. This data belongs to the advertisers: it reflects their decisions about their own business. But Google contractually prohibits advertisers from using their data in an interoperable way with other search advertising platforms, such as Microsoft’s adCenter.

This makes it much more costly for Google’s advertisers to run portions of their campaigns with any competitor, and thus less likely that they will do so. That is a significant problem because most advertisers figure that they have to advertise first with Google. If it’s too expensive to port their advertising campaign data to competing advertising platforms, many won’t do it. Competing search engines are left with less relevant ads, and less revenue. And while this restraint isn’t visible to consumers, its effects are nonetheless felt across the Web. Advertising revenue is the economic propellant fueling the billions of dollars needed for ongoing search investments. By reducing competitors’ ability to attract advertising revenue, this restriction strikes at the heart of a competitive market.

Fifth, this undermining of competition is reflected in concerns that go beyond Google’s control over content. One of the ways that search engines attract users is through distribution of search boxes through Web sites. Unfortunately, Google contractually blocks leading Web sites in Europe from distributing competing search boxes. It is obviously difficult for competing search engines to gain users when nearly every search box is powered by Google. Google’s exclusivity terms have even blocked Microsoft from distributing its Windows Live services, such as email and online document storage, through European telecommunications companies because these services are monetized through Bing search boxes.

Finally, we share the concerns expressed by many others that Google discriminates against would-be competitors by making it more costly for them to attain prominent placement for their advertisements. Microsoft has provided the Commission with a considerable body of expert analysis concerning how search engine algorithms work and the competitive significance of promoting or demoting various advertisements.

Over the past year, a growing number of advertisers, publishers, and consumers have expressed to us their concerns about the search market in Europe. They’ve urged us to share our knowledge of the search market with competition officials. As they’ve pointed out, the stakes are high for the European economy. On any given day, more than half of all Europeans use the Internet, and more than 90 percent of them look for information about goods and services on the Web. Indeed, the European Commission’s Digital Agenda made clear that commerce is moving online, where two-thirds of Europeans begin their shopping process. It’s therefore critical that search engines and online advertising move forward in an open, fair and competitive manner.

There of course will be some who will point out the irony in today’s filing. Having spent more than a decade wearing the shoe on the other foot with the European Commission, the filing of a formal antitrust complaint is not something we take lightly. This is the first time Microsoft Corporation has ever taken this step. More so than most, we recognize the importance of ensuring that competition laws remain balanced and that technology innovation moves forward.

We readily appreciate that Google should continue to have the freedom to innovate. But it shouldn’t be permitted to pursue practices that restrict others from innovating and offering competitive alternatives. That’s what it’s doing now. And that’s what we hope European officials will assess and ultimately decide to stop.

Please see this disclosure related to me and Google.

“Computers are really here to make us happier,” Schmidt said, promising these devices will give people more time with friends and family, not less.

Schmidt, who gave up the CEO role last month, said that nearly all devices will get more interesting when they connect to the Internet. A music player that doesn’t connect to the network isn’t very interesting, he said, perhaps opening the door to the announcement of a long-talked-about, cloud-based Google music service.

The talk is just geting started. Mobilized got a really good seat in the front row, just two seats over from Andy Rubin, and has live updates below.

5:59 pm: Schmidt talking about things phones should be able to do, such as figure out better traffic routes and bridge language barriers. “You really can do magic,” he says, pointing to Google Translate, which lets you speak one language and have a language you don’t speak returned. “That’s done in a twentieth of a second or what have you,” he says.

6:01 pm: Brings out colleague to show an application on “an interesting new device.”

6:03 pm: The device is the Motorola Xoom tablet and the program is “Movie Studio,” an app built from the ground up for creating and editing movies on tablets.

He has a few images and videos from around Barcelona.

He creates a movie onstage and shows how it can easily be shared on YouTube. (This looks like iMovie and Windows Live Movie Maker so far–both of which also let you edit movies and share directly to YouTube.)

6:07 pm: Upload goes slowly, though, as Schmidt notes it is the problem of doing a demo at a mobile network convention where everyone is hammering the networks.

6:09 pm: The goal of many of Google’s products, Schmidt says, is to do tasks quickly so that people can get back to being human. “We ultimately believe that speed matters,” Schmidt says. Google Instant, he says, can save two to five seconds per search.

Search is also becoming more personal. With permission, users can get more information. Next up, he says, is autonomous search as information comes up as one walks or drives, and is driven by location.

“That’s just the beginning of a large number of new apps that use that infrastructure to make a big difference,” Schmidt says.

Schmidt says how much info to share will be up to the user, but those that opt in can get much richer results.

There’s also a trend, he says, to returning more structured data, such as travel.

6:12 pm: Stat time: 120 million people using Chrome, up three times from a year ago.

YouTube revenue doubled in 2010. Now just being able to monetize professional content at a rate that starts to make sense for content partners.

6:18 pm: Computer science can help all kinds of things, Schmidt says. With phones and tablets, “You never forget everything” which is precisely what phones are good at.

If you choose, you can remember the hotels you stayed in and the people you met, etc., “Humans forget,” he says.

Computers are also preventing people from ever getting lost. When I was a boy growing up in Europe “I was always lost,” Schmidt says.

Translation may not prevent war, but should at a minimum increase dialogue, Schmidt says.

6:18 pm: “Even better you are never lonely,” he sats, because computers can point you to nearby friends or connect you to distant ones.

You are never bored, Schmidt says. You are never out of ideas because we can always suggest what you can do next.

Other changes, include the self-driving cars that Google has been working on.

“It’s obvious that cars should drive (themselves),” he says, adding that there will be a “kill switch” in case there are bugs. And it will take time, he says.

“This is coming. It will be decades, I suspect–not a year.”

He also says these innovations will scale to the masses.

“It’s a future for the masses, not the elites,” he says.

6:21 pm: With that, on to Q&A.

6:23 pm: Talking about targeted broadcast quality ads as next frontier.

“Who wants to see an ad that is not relavent to them,” Schmidt says. And that leads to revenue, which Schmidt points out is the whole point of advertising in the first place.

6:24 pm: Question on Android fragmentation saying there is frustration among phone makers and developers.

“We hear some of this,” Schmidt says. “You’ve stated the problem more strongly than I would have, but I will take that as feedback.”

6:26 pm: Question about role of Google in financial services.

Schmidt quips that Larry Page and Sergey Brin periodically suggest that Google issue Google Bucks as its own currency, but Schmidt says he always points out the regulatory issues.

On a serious front, he talks about the power of near-field communications as a means to turn real-world transactions into electronic ones.

“In that are very large businesses,” he says.

(Google built NFC into its Nexus S device.)

6:29 pm: Are you interested in Twitter?

“We love Twitter and I like to tweet,” Schmidt says, eliciting laughter from the crowd.

6:31 pm: Why so many operating systems?

Sometimes these things occur because the teams move so quickly, Schmidt says.

People have been asking when Gingerbread and Honeycomb will come together. Schmidt: You can imagine the follow-on release will start with an “I” and be named after a desert and will combine the best of both, Schmidt says.

These releases occur on roughly a six-month cycle, Schmidt says.

6:33 pm: On Chrome OS, Schmidt says there will be an opportunity to merge that with Android over time, but better to wait for the operating systems to mature and a natural time than to push them together too soon.

6:34 pm: On HTML5, Schmidt imagines that some number of years from now, most apps–mobile and desktop–will be running on HTML5.

6:39 pm: Question on Google’s role in health care.

Phone should be able to, at a minimum, carry medical info. Several percent of queries on Google are health-related.

6:42 pm: Is Facebook with its “Like” button a main competitor?

Today our main competitor is Microsoft. Microsoft has a good product in Bing, he says.

“There’s a couple cases where it might be too good. We discussed that in a blog post.”

They have the cash, the scale and the reach to do good and amazing things.

6:44 pm: On Nokia-Microsoft partnership:

“We would have loved it had they chosen Android,” Schmidt says. “That offer remains open.”

Android would have been a good choice for Nokia, he says.

‘We certainly tried” to get them, he says.

6:46 pm: How do you approach the fact that Android going higher and lower in the market?

Schmidt says that the company tries to show the best in its Nexus line, while putting minimum specifications out there to set the bar for what developers can expect.

6:47 pm: Question on why Google is not more broadly used in the education market?

Schmidt says the company has funded a number of YouTube professors. “We’ve not yet come up with the killer [education] app,” he says.

6:49 pm: Asked about Google’s interest in the PC operating system market, Schmidt says that Google’s answer is Chrome OS. Sometime in the spring you will see a series of PC makers come out with Chrome OS devices. However, he adds they won’t run current PC apps, such as Windows apps.

“It does not run any of your current PC applications so you might think about it,” Schmidt said. That said, he adds there are, in most cases, cloud-based options that are roughly equivalent.

6:52 pm: With that, Schmidt wraps up.

Satya Nadella (pictured here), the Microsoft exec who has been in charge of its Bing search effort, has been promoted to president of its Server and Tools Business.

He replaces Bob Muglia, a longtime exec who was ousted recently in CEO Steve Ballmer’s effort to shake things up at the company and stress the company’s technical expertise.

A 19-year Microsoft veteran, Nadella has most recently led the engineering efforts as an SVP in the Online Services Division, which includes Bing, the MSN portal and online advertising efforts.

“Nadella brings deep engineering and online services knowledge to $15 billion business,” said a Microsoft press release just issued.

In related news, Amitabh Srivastava, the SVP in the Server and Cloud Division who runs its Windows Azure cloud and Windows Server efforts, will leave the company. He was considered a leading internal candidate for the top job in the Server and Tools Business that Nadella got.

Both internal and external execs were eyed for the job, but it’s likely Nadella got it because of his early career in the server arena at Microsoft, as well as his experience running one of the biggest and most complex cloud efforts on the Web at Bing.

Indeed, though his efforts were costly and perhaps even futile, Nadella has had some success in innovating search for Microsoft with Bing, including delivering a well-regarded and quickly evolving product and improving market share.

He also was key in striking Microsoft’s advertising and search partnership with Yahoo.

He will have his hands full running the Server and Tools Business, which is critical to the company’s future and its cloud computing aspirations.

Microsoft said Nadella will be in charge of strategy, engineering, marketing and product development for Microsoft’s server, tools and cloud platform efforts.

“This includes developing the technology road map and vision to drive adoption of the company’s products, tools and services, and delivering the company’s next generation of cloud solutions for business customers,” Microsoft said.

Delivering such cloudtastic results will be a tall order, of course.

According to a recent post by New Enterprise’s Arik Hesseldahl:

“The Server and Tools Business is at $14.9 billion in annual revenue (fiscal 2010) Microsoft’s third largest division behind the Windows/Windows Live Division and and the Microsoft Business Division, both of which reported revenues north of $18 billion in 2010. On Muglia’s watch sales at STB grew more than 12 percent, and its operating margins went from 31 percent in 2008 to 37 percent in 2010. However, STB is nowhere near as profitable as the other two divisions: Business Division reported operating margins of 63 percent in 2010 while Windows saw 70 percent. Ballmer says in his memo that he’s eager to see stronger growth from STB.”

Here is the official press release, but more to come:

Microsoft Appoints Satya Nadella as President of Server and Tools Business

REDMOND, Wash.–Feb. 9, 2011–Microsoft Corp. today promoted Senior Vice President Satya Nadella to president of Microsoft’s Server and Tools Business.

“We’re already making strong traction across our Server and Tools Business by embracing cloud services,” said Microsoft Chief Executive Officer Steve Ballmer. “Satya has deep experience in both our server business and online services, which will help accelerate our momentum while setting the course to deliver the cloud computing scenarios of the future.”

As president of the Server and Tools Business, Nadella will oversee the overall strategy, engineering, marketing and product development for Microsoft’s server, tools and cloud platform efforts. This includes developing the technology road map and vision to drive adoption of the company’s products, tools and services, and delivering the company’s next generation of cloud solutions for business customers.

“Our server and tools business is one of the fastest growing and most profitable businesses at Microsoft,” Nadella said. “I see great opportunity for Microsoft to grow the business and also lead the way in the transformation of enterprise IT. I’m excited to work with such a high-caliber team to chart the path for our continued success today and growth in the future.”

Nadella, 43, has been with the company for 19 years and most recently led the engineering efforts in the Online Services Division, which includes overseeing the technical strategy for one of the largest cloud infrastructures in the world, spanning the company’s Search, Portal and Advertising platforms.

Nadella joined the Online Services Division in April 2007, and was instrumental in leading the technical efforts for several critical milestones such as the launch of Bing, new releases of MSN, and the integration of Yahoo! across Bing and adCenter. Under his leadership, the Online Services Division has also built a strong engineering organization by attracting some of the most experienced technical minds from within Microsoft and across the industry.

Before joining the Online Services Division, Nadella led Microsoft Business Solutions, which focuses on the Microsoft Dynamics line of enterprise resource planning and customer relationship management products, and spent several years leading engineering efforts in Microsoft’s Server Group.

As announced in January 2011, Bob Muglia, previously president of the Server and Tools Business, will leave the company this summer. Muglia will work with Nadella as he transitions to his new role leading the Server and Tools Business.

]]> http://allthingsd.com/20110209/bing-overlord-satya-nadella-promoted-to-president-of-server-and-tools-at-microsoft/feed/ 1 http://allthingsd.com/20110127/microsoft-crows-on-its-earnings-conference-call-touting-xbox-and-office-strength/ http://allthingsd.com/20110127/microsoft-crows-on-its-earnings-conference-call-touting-xbox-and-office-strength/#comments Thu, 27 Jan 2011 22:42:14 +0000 Ina Fried http://mobilized.allthingsd.com/?p=3104 Microsoft began its earnings conference call on Thursday by touting the company’s record earnings and revenue–results that topped expectations amid strong performance in the Office and Xbox units.

“Business and consumer response to our latest wave of innovation…helped drive yet another quarter of healthy revenue growth,” CFO Peter Klein said during the call. “Kinect in particular exceeded our expectations,” he said, calling Kinect the fastest-growing consumer electronics product in history.

Earlier on Thursday, Microsoft posted earnings and revenue that topped expectations, amid strong performance in the Office and Xbox units. The company was also quite literally ahead of expectations as it released earnings before the close of trading after one or more media outlets got a hold of a draft version of its earnings release. The company said it will re-evaluate procedures to make sure it doesn’t happen again.

The company reiterated, as it told Mobilized on Wednesday, that its partners shipped two million Windows Phone 7 devices to carriers during the quarter. While Klein is pleased with those results, he said, “We realize we still have a lot of work ahead of us.”

Office 2010 is the strongest consumer version of the product in company history and also doing well among businesses, Klein said.

Update, 2:48 pm: Enterprise IT spending expected to grow this year, and Office and Windows remain among businesses’ top tech priorities this year, Klein said.

On the search side, Klein acknowledged that the Yahoo-Microsoft partnership has created some disruption in the marketplace, with the company hoping to get more benefit from the deal in the coming quarter.

2:52 p.m.: Microsoft’s product portfolio “has never been stronger,” Klein said.

On to Q&A.

3:05 pm: As it typically does, Microsoft noted that emerging markets are growing faster than mature ones. One analyst asked Microsoft to provide some more detail on how Microsoft’s business differs in such markets. Among other things, Microsoft said its pricing tends to be about half what it gets in mature markets.

3:08 pm: Microsoft said on the call it sees a bit of a drag from consumer devices like the iPad, though it didn’t use the “i” word.

3:11 p.m.: Call ends.

]]> http://allthingsd.com/20110127/microsoft-crows-on-its-earnings-conference-call-touting-xbox-and-office-strength/feed/ 0 http://allthingsd.com/20110119/windows-executive-brad-brooks-leaving-microsoft-for-juniper-with-the-internal-memo/ http://allthingsd.com/20110119/windows-executive-brad-brooks-leaving-microsoft-for-juniper-with-the-internal-memo/#comments Wed, 19 Jan 2011 21:53:14 +0000 Ina Fried http://mobilized.allthingsd.com/?p=2711 Brad Brooks, a vice president in Microsoft’s Windows unit, is leaving the company to join Juniper Networks, where he’ll serve as vice president of enterprise marketing. The move reunites Brooks with Juniper CEO Kevin Johnson, who had been president of the Windows and Windows Live unit at Microsoft before also jumping to Juniper.

A Microsoft representative said the company had no immediate comment on who would fill Brooks’ shoes. A source says they are still figuring that one out. Brooks’ departure is the latest in a string of departures, including last week’s announcement that Server and Tools unit President Bob Muglia would leave the company this summer.

Here’s a copy of Brooks’s memo to the Windows team:

“Well done is better than well said” – Ben Franklin

This quote says so much about the Windows team and my last 9 incredible years here at Microsoft.

We did so much together.

We touched billions of customers with our messages. We launched amazing products. We have changed the world, and most importantly, we have delivered results.

Whether it was by creating vision and curiosity in the marketplace with Media Center; or turning a declining $900M Windows SA business into a $3B pillar of the enterprise value proposition; or dreaming about what a Microsoft retail experience could be and seeing the company make it a reality; or reinventing how we talk and touch consumers with our marketing and advertising; or how to just plain launching a darn good product into the world – Microsoft style – with Windows 7. We let our actions speak for us, not our words.

We did so much together.

My message here to you is really about “we” and not “me.” There are no self-made people in this world. My incredible journey has been because of you — the team, the Windows team, the Microsoft team. We have overcome some of the toughest challenges in the business, and certainly we continue to be engaged in some of the fiercest competitive battles Windows has ever faced; but we have also never been better positioned with current product, future road map, leadership and people talent to win these battles in the 9 years I have been here.

Microsoft is a family in its own right, and it has also grown to become a part of my family in so many ways. I can fly into any city in the world and say that I have a Microsoft friend close by that I can call on. That is truly special and amazing.

But, after a lot of difficult thought, I’ve decided to make a change. These are your battles now, I’ve got new battles to go fight with Juniper Networks (and as you know I have the most fun when the competitive fight is on) and my new adventure will give me plenty of opportunity to have “fun.”

I will be around through February 4th working on transition and providing my best and last advice and counsel on the Windows business. My door will be open if you want to come by and talk about anything.

We did so much together, the journey has been incredible and for that I can only say – Thank you!

Good-bye for now,
-Brad

]]> http://allthingsd.com/20110119/windows-executive-brad-brooks-leaving-microsoft-for-juniper-with-the-internal-memo/feed/ 0 http://allthingsd.com/20110118/microsoft-brings-the-first-piece-of-office-to-the-iphone-onenote/ http://allthingsd.com/20110118/microsoft-brings-the-first-piece-of-office-to-the-iphone-onenote/#comments Tue, 18 Jan 2011 17:49:16 +0000 Ina Fried http://mobilized.allthingsd.com/?p=2574 While Microsoft still hopes to one day rival the iPhone, the company’s Office unit is the latest part of Redmond to acknowledge that, for now at least, the iPhone reigns supreme.

Microsoft is releasing on Tuesday a version of its OneNote note-taking application for the iPhone. The program will be free for a limited time, Microsoft said, adding that notes taken on the iPhone will automatically be synchronized and backed up to the Web using Microsoft’s Windows Live SkyDrive.

“We know people care more about what they do than where they do it,” Microsoft Office unit Vice President Takeshi Numoto said in a blog post published on Tuesday. “Whether it’s on a PC or Mac, a mobile phone or online through the Web Apps on multiple browsers, we continue to bring Office to the devices, platforms, and operating systems our customers are using. It should be about the ideas and information, not the device, right?”

Of course, OneNote is just one piece of Office–and one of the newer and least used of the main components at that. It’s also an interesting choice, since OneNote isn’t available natively for the Mac. But Microsoft seems to be leaving the door open to bring other pieces of Office to the iPhone.

In an interview, Microsoft senior director Jason Bunge said that the company had been working on OneNote for the iPhone for the past 18 months. Bunge wouldn’t say whether other Office components are also in the works, saying only that the company had no other apps to announce at this time.

“You can absolutely expect Office to expand its presence across other platforms,” Bunge said.

As for whether Microsoft plans to eventually charge for OneNote or other iPhone apps, Bunge said he didn’t know how long OneNote would remain free and had no other details on Microsoft’s pricing plans.

The goal in bringing OneNote to the iPhone, he said, is to allow those who do use the program on the PC to have it with them wherever they are. Rival programs, such as Evernote, have already been available on the iPhone.

Bunge did put in a bit of a plug for Windows and Windows Phone, saying, “We want Office on our Windows devices to be the best productivity experience that’s possible.”

OneNote is not Microsoft’s first app for the iPhone. Redmond already offers a Bing app, as well as Windows Live Messenger and the Microsoft Tag barcode reader, among other programs.

Update, 12:15 pm PT: Some people, including Mobilized, are getting an error message when they try to log in with their Windows Live ID. Since OneNote for the iPhone requires a Windows Live account, it effectively means those encountering the bug can’t use OneNote for the iPhone at all for now.

Microsoft says it is aware of the issue and is investigating.

1:45 pm PT: Microsoft has posted a blog noting the issues and says they are appearing intermittently as a result of high demand, with the recommended approach as “just keep trying.”

]]> http://allthingsd.com/20110118/microsoft-brings-the-first-piece-of-office-to-the-iphone-onenote/feed/ 0 http://allthingsd.com/20101020/microsofts-new-windows-phone-7-novel-but-lacking/ http://allthingsd.com/20101020/microsofts-new-windows-phone-7-novel-but-lacking/#comments Thu, 21 Oct 2010 00:03:42 +0000 Walter S. Mossberg http://ptech.allthingsd.com/?p=1579 Nearly four years after Apple unveiled the iPhone, and more than two years after Google introduced its first Android smartphone, Microsoft is launching its effort to catch up. On Nov. 8, AT&T and T-Mobile will begin selling the first phones powered by the software maker’s new Windows Phone 7 operating system.

I’ve been testing two of these initial Windows Phone 7 phones, the Samsung Focus from AT&T and the HTC HD7 from T-Mobile; each will cost $200. Both are slender phones with large screens and virtual keyboards, though the Samsung is thinner and lighter than the HTC.

Microsoft has imposed tight requirements on the new Windows Phone 7 phones—including fast processors, decent screens and adequate memory. However, in my testing this time, I didn’t focus on the hardware. Instead, I bored in on the new Microsoft operating system, set to show up on nine phones this year, including some with physical keyboards.

My conclusion is that Microsoft has used its years in the smartphone wilderness to come up with a user interface that is novel and attractive, that stands out from the Apple and Google approaches, and that works pretty well. Instead of multiple screens filled with small app icons, or the occasional widget, Windows phones use large, dynamic tiles that can give you certain information, like your next appointment, at a glance. And it has special “hubs” for things like contacts and entertainment that use bold, attractive interfaces and offer personalized, updating information.

The Samsung Focus’s large touch tiles

However, despite having all that time to study its rivals, Microsoft has inexplicably omitted from Windows Phone 7 key features now common, or becoming so, on competitive phones. These missing features include copy and paste, visual voicemail, multitasking of third-party apps, and the ability to do video calling and to use the phone to connect other devices to the Internet. The Android phones and the iPhone handle all these things today.

Plus, because it has waited so long to enter the super-smartphone market, Microsoft is starting way behind in the all-important category of available third-party apps. At launch next month, the company hopes to have about 1,000 apps available for the Windows Phone 7 platform, compared with nearly 100,000 for Android phones and around 300,000 for the iPhone. That means Windows phones will, by definition, be less versatile than their main competitors, at least at launch.

In addition, Microsoft, unlike Apple, has ceded prominent home-screen real estate to the phone makers and carriers so they can push their own apps, like subscription-based TV and navigation services.

To be sure, Windows Phone 7 has a few advantages. These include built-in mobile versions of Microsoft Office (present for years on earlier Microsoft-powered phones) and of its popular Xbox Live gaming service, which also interacts with Xbox game consoles. There is a nice feature that allows the camera to be used quickly, even if the phone is locked. And search works particularly well, including a mode that allows you to enter search commands by voice from any screen. Phone calling also worked just fine, with few failed calls, good voice quality and easy connection to a Bluetooth device I tried.

But I couldn’t find a killer innovation that would be likely to make iPhone or Android users envious, except possibly for dedicated Xbox users. Even the built-in Office can be replicated with third-party Office-compatible apps on competing platforms; and the iPhone and Android phones also can interoperate with Microsoft’s corporate Exchange email, calendar and contact system.

So for now, I see Windows Phone 7 as mostly getting Microsoft into the game, and replacing the stale, complicated Windows Mobile system that preceded it. It will get better. The company is already working on a copy and paste system, and said it is coming early next year. But, today, I see Windows Phone 7 as inferior to iPhone and Android for most average users. It’s simply not fully baked yet.

The main feature of Windows Phone 7 is the Start screen, which takes the form of a long vertical list of tiles that can represent either an app or a hub. The phones lack multiple home screens or traditional folders for grouping apps. These tiles are dynamic: They can show things like rotating photos of friends, or how many unread emails you have.

Microsoft doesn’t intend for you to place every app or feature on the Start screen. Instead, some apps, like games, go automatically into one of the special tile hubs, which combine related functions. And all other apps pre-installed or added to your phone go into another long master list you can see by flicking aside the tile view or tapping an arrow.

It’s a clean, simple, different approach. But there is a downside. As you “pin” your favorite apps, contacts, photos or Web sites to the Start screen, the list of tiles grows longer, and you have to scroll further and further to reach some. There is no shortcut for getting back to the top of such a list, as there is on the iPhone.

The hubs have a level of social and functional integration seen on some Android phones and on Palm’s webOS operating system, now owned by Hewlett-Packard. For instance, in the People hub, you not only see your local contacts, but those synced from Facebook or Microsoft’s own Windows Live service. This hub, like the others, borrows the elegant interface from Microsoft’s failed Zune music player, so you can flick left and right to see just recent contacts or to see your friends’ status updates. But the People hub doesn’t have Twitter.

Microsoft sees this combination of tiles and hubs as a “glance and go” interface for quickly seeing important information without opening apps, as on the iPhone. But I was disappointed that more information wasn’t presented on the tiles. For instance, unlike in some Android apps and widgets I’ve used, a stock market tile and a weather tile I downloaded didn’t show on their surfaces the latest information.

The calendar, which syncs with Exchange, Windows Live, or Google, can’t sync with Yahoo or MobileMe, and lacks a week view. The email program syncs with a variety of services, but lacks a unified inbox, so you have to clutter your Start screen with separate tiles for each account.

Another downside for some users: The phones can be used in horizontal view for photos and Web pages, or for typing email, but some screens, like the Start screen and hubs, are fixed in vertical mode.

Microsoft has done a good job with the Web browser, which I found generally comparable in speed and features to the iPhone and Android browsers. But unlike on some new Android phones, it doesn’t support Adobe Flash content.

The People hub borrows the elegant interface from Microsoft’s failed Zune music player, so you can flick left and right to see just recent contacts or to see your friends’ status updates.

The built-in Office suite is very nice. It can link to Microsoft’s SharePoint corporate online document system. One of its apps, OneNote, also synced in my tests with Microsoft’s consumer-focused SkyDrive Web file-storage system. It has a nice feature that makes it easy to jump to sections of long documents, allows for making comments on files, and lets you see presentations broadcast over the Internet.

However, this new mobile Office failed to open a simple Word document I tried. Microsoft says this plain document had some hidden corruption, but it opened on an iPhone and Android, and was editable in their Quickoffice app. Microsoft says it is working on a fix.

Music, video and photos all worked well, and you can use a Zune subscription on the phone. I was easily able to sync media files with a Windows PC using a new version of the Zune software, and I also tried a pre-release version of the new Macintosh Zune software, which is more limited, but also worked properly.

The Microsoft app store, called Marketplace, worked fine, and has a nice try-before-you-buy feature for some apps.

Last but not least is the Xbox Live hub, the center for gaming. It contains games from Microsoft and other developers, and includes your avatar from the Xbox Live service. You can socialize with, and play against, others on the service. For Xbox Live fans, this is mobile heaven.

Overall, I can’t recommend Windows Phone 7 as being on a par with iPhone or Android—at least not yet. Unless you’re an Xbox Live user, or rely on Microsoft’s SharePoint corporate Web-based document system, it isn’t as good or as versatile as its rivals.

Find all of Walt’s columns and videos at walt.allthingsd.com.

Write to Walter S. Mossberg at walt.mossberg@wsj.com

]]> http://allthingsd.com/20101020/microsofts-new-windows-phone-7-novel-but-lacking/feed/ 0 http://allthingsd.com/20100625/get-em-boies-salesforce-countersues-microsoft/ http://allthingsd.com/20100625/get-em-boies-salesforce-countersues-microsoft/#comments Fri, 25 Jun 2010 16:20:52 +0000 John Paczkowski http://digitaldaily.allthingsd.com/?p=43594

“I guess you know you’ve made it in software when Microsoft is protesting your event. Or maybe when they’ve sued you. This is the greatest thing that’s ever happened in my career.”

– Salesforce.com CEO Marc Benioff

Salesforce.com CEO Marc Benioff says Microsoft is a patent troll. Looks like it takes one to know one. On Thursday, the company answered Microsoft’s charges of patent infringement with patent-infringement charges of its own.

In a suit filed in U.S. District Court in Delaware, Salesforce accuses Microsoft of willfully violating five of its patents and using them in everything from Windows 7 to the Windows Live authentication system. And the company is really going for the neck here: Not only is it seeking triple monetary damages, it has hired David Boies, the former U.S. Justice Department attorney who successfully argued the agency’s antitrust case against Microsoft, to represent it.

But if Microsoft (MSFT) finds this disconcerting, the company isn’t letting on. Reached for comment, Horacio Gutierrez, vice president and deputy general counsel, said it’s still intent on taking Salesforce (CRM) to the mat over this. “We are reviewing Salesforce.com’s filing, which we have just received,” he said. “We remain confident about our position and will continue to press ahead with the complaint we initiated in the U.S. District Court for the Western District of Washington.”

According to sources, Robin Domeniconi (pictured here), Microsoft’s VP for U.S. Advertising Sales, Publishing and Marketing, will be leaving the company.

While Domeniconi is leaving, sources said Microsoft (MSFT) is close to hiring Carolyn Everson of MTV Networks to head up its online ad sales force globally.

While the deal is not done, Microsoft has been looking to fill the key slot for more than a year.

Everson (pictured here) is currently EVP of Strategy and Operations for the MTV Networks U.S. ad sales department.

Interestingly, sources also said Everson was also on the list of candidates Yahoo (YHOO) is still perusing to fill the key U.S. ad sales jobs after Joanne Bradford departed recently for Demand Media.

Domeniconi, a former Time Inc. exec, who came to Microsoft in 2008, announced her departure on Wednesday, said insiders.

She has been in charge of executing sales and marketing strategies for Microsoft’s media properties, including MSN, Windows Live, Xbox Live and Bing.

A Microsoft spokesman declined to comment.

Well, it took Microsoft long enough to update the features of Hotmail, which the company is announcing this week.

Some new doodads include better filtering, more social integration, lots of multimedia content, such as photo slideshows and–perhaps most importantly–the ability to use Microsoft Office software documents like PowerPoint within the online email service.

It’s a wonder it took so long for Microsoft (MSFT) to upgrade and innovate–Dear Windows Live Hotmail team, conversation views in email is not new to anyone but you–the service, although it remains No. 2 after Yahoo (YHOO) Mail. Google (GOOG) Gmail is third.

Microsoft, which blogged about the changes here, has called the whole shebang of releases in its Window Live services “Wave 4.”

Wave 3, um, was in 2008.

Still, here is a very good Microsoft video about it all, though I am not sure what’s up with the orange-dot lady: