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Wednesday, Sept. 21, 2005

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SEATTLE — Microsoft Corp. is reorganizing its corporate structure and giving one of its newest executives broader powers in an effort to better compete against its rivals, including Google Inc. and Yahoo Inc.

The corporate changes announced Tuesday are designed in part to help Microsoft move toward more Internet-based service offerings, which have been championed by those competitors and are seen by some as a serious threat to Microsoft's dominant Windows operating system. The changes also are aimed at helping the company become more nimble.

"These changes are designed to align our business groups in a way that will enhance decision making and speed of execution, as well as help us continue to deliver the types of products and services our customers want most," Microsoft Chief Executive Steve Ballmer said in a news release.

Under the changes, Ray Ozzie, a highly respected software veteran who came to Microsoft when it acquired his company, Groove Networks, will be charged with helping the company coordinate and improve Internet-based service offerings. These include Windows Update, the company's online tool for issuing security fixes; its MSN consumer online unit, including Web-based e-mail, instant messenger and search technology; and its Xbox Live online videogame service.

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Ozzie will retain his title of chief technical officer. He is one of three at the company.

The company also plans to reorganize from seven broad business units to three new business divisions.

Microsoft Platform Products and Services will include the company's Windows, server and tools, and MSN online divisions. It will be led by Kevin Johnson and Jim Allchin.

Allchin, a long-time executive charged with overseeing its flagship Windows operating system, will retire at the end of 2006, after the new version of Windows is released.

The other two units are Microsoft Business Divison, which will include its Office products and products for small- and mid-sized businesses, and Microsoft Entertainment and Devices Division, which will include its Xbox game console, other games, mobile phone and handheld devices products.

© 2005 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

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