MSN Meltdown: Senior VP David Cole forced out, Yusuf Mehdi is next

MSN is a swamp, and Microsoft is flushing it out. MSN director David Cole sent a company memo announcing his retirement this morning. The senior VP ran the network since 2001; since then, its search market share has slowly drifted to the bottom.

Last year, Microsoft exec Kevin Johnson was promoted to co-president, with MSN as one of his fiefdoms. Johnson asked about Cole and heard he wasn't too hot. Now he's ushered him out. But Johnson gave Cole time to gather his wits and spin his "leave of absence" as a "personal decision." From Cole's internal memo to MSN:

Did Kevin or Steve ask me to leave? No. Both Kevin and Steve made it clear they prefer that I stay in a leadership role in MSN. My Leave of Absence is a personal decision I made on my own.

In other words, "You don't have to go home, but you can't stay here."

MSN Meltdown: Senior VP David Cole forced out, Yusuf Mehdi is next


Cole, far left, on stage with Bill Gates at a presentation of Windows Live this November. The end is near. [Source]

More analysis and the full memo after the jump.

Reading the memo is a bit sad, thanks to the obvious pains Cole takes to put a brave face on all this.

Have I lost confidence in MSN's ability to win? Ha! Not even close. While our progress in the market doesn't completely show it yet, I feel strongly that our strategy, our investments, and our leadership is on track to get us to a winning market position.

Maybe he really believes it, or maybe even he knows that the future is Live. Someone ought to hold Cole and say "It's okay, David. You tried." After all, no one wants to head up a dying web brand.

Incidentally, there's one big question now. Who will Johnson pick to replace Cole? With Windows Live set to take over Microsoft's online presence, no one wants to get left holding the hot potato.

One exec doesn't have to worry. Yusuf Mehdi, in charge of Information Services under Cole, is expected to soon take his own Johnson-forced "sabbatical."

MSN Meltdown: Senior VP David Cole forced out, Yusuf Mehdi is next


Mehdi presents MSN 8.0 in 2002. Is Bill already planning MSN's doom? [Source]

Below, the memo:


From: David Cole
Sent: Friday, February 17, 2006 9:02 AM
To: MSN & Personal Services (WW FTE's Only)
Cc: Executive Staff
Subject: David Cole

I want to let you know about a personal decision I ve made to take some time off.

To begin, I want to stress how strongly I believe in what we are doing here in MSN, and what the company is doing overall. These are exciting times for Microsoft and the MSN team. I m thrilled about our Windows Live strategy and progress, and how we are investing in MSN.com. The progress we are making across the business is truly amazing and I am so very proud of all that our team has accomplished. We are competing hard in what I believe is the most exciting segment in the technology industry. We re investing heavily to win, we've got a strong set of leaders, we've got the right strategy, and the company is backing us to win while transforming itself to become a leading software services provider to all customers. And I want to point out explicitly that I believe in our alignment with the Windows team under Kevin's leadership of PSD.


But after nearly 20 years at Microsoft, including 6+ years in the MSN division, I have decided to take some down time. I won't be going anywhere right away and I m committed to continue leading the division to help Kevin develop a solid transition plan. I expect to stay on through April, at which point I'll take a 1-year Leave of Absence. During my remaining time on the job, I'll make sure our strategy is clear, that we are invested at levels to win, that we are off to a good start on FY07 planning, and that there is a good leadership transition.

Obviously, this is not a decision I am making lightly. I love to work, interact with smart people, and have an impact. But during the past 18 months, I've been contemplating what to do with the second half of my career and I've been so busy that I still don't have the answer. Taking this leave will give me the time needed to recharge and figure out what is next for me. My initial plan is to spend more time with my family (whether they like it or not), catch up on personal projects, recreate a lot more in the outdoors, and do other recharging-type activities. I also will take time to explore the breadth of what the world has to offer and decide on the type of work I want to commit myself to for the next 10, 15, or 20 years.

As I think back over the past 20 years, I can still vividly remember my first job in Product Support in 1986 when I was answering phone calls from customers. That was an incredible starting point for me as I learned from the customer point of view. From there, I had the opportunity to participate and lead aspects of some world-changing projects like Windows 3.0, Windows 3.1, Windows 95, Internet Explorer, Windows CE, and now MSN and Windows Live. Throughout that time, I've had the privilege of working with an incredible number of smart and talented people. It's been a complete thrill ride that s allowed me to continually pursue my passion. The support I've gotten from all across the company — at all levels — has been astounding.


I m sure there will be some speculation about why I m taking a break now I have a great job at an amazingly exciting time in the company s history. And since I know this might not make immediate sense to some, I want to directly address a few of the obvious speculations head on:

Did Kevin or Steve ask me to leave? No. Both Kevin and Steve made it clear they prefer that I stay in a leadership role in MSN. My Leave of Absence is a personal decision I made on my own.

Do I not like being part of PSD or Kevin's org? Quite the opposite is true. I can take some credit for helping get the MSN organization aligned more closely with the Windows organization to execute on our Windows Live strategy. Kevin is a tremendous leader and I have great respect for him. We re poised for success and if this were a different point in my career, I would absolutely be staying.

Have I lost confidence in MSN's ability to win? Ha! Not even close. While our progress in the market doesn't completely show it yet, I feel strongly that our strategy, our investments, and our leadership is on track to get us to a winning market position. It's a matter of timing and execution. I definitely would not be taking a break if I thought things were headed in the wrong direction — that s not my style. I m choosing to take a break precisely because we are headed in the right direction with great momentum.

There is never a good time for a transition like this to happen. But I feel that the division is in really good shape from a strategy, leadership, and investment level point of view. We just need to go get it done, and that is happening across the division at all levels. I will be working closely with Kevin to figure out the transition plan for new leadership and until that plan is announced, you can count on me through April as you always have.

To close, I want to thank all of you for your ideas, your support and your hard work in MSN. We ve made incredible progress and I want to encourage you to keep innovating, growing the business, and satisfying customers. There is an exciting future ahead with Windows Live and MSN, and I know I will hear and read great things about this group as the year unfolds.

Keep up the great work!

David


Comments, rebuttals, analysis, and educated predictions are, as always, welcome. E-mail tips@valleywag.com.

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