Microsoft looked within to find a replacement for its outgoing search chief Chris Payne, while reorganizing its search department and bringing its ad platform group under the direction of the division.

"Aligning Search and our Ad Platform efforts under a single R&D leader is essential as we drive advances in our search, commerce, and payments infrastructure, and evaluate change-the-playing-field opportunities," the company said in a statement.

The company continues to lose search share, although it has managed to slow its decline. During the month of February, it managed a 10.5 percent share according to comScore Networks, down 0.1 percent from the month previous.

Satya Nadella, who was previously the company's Microsoft Dynamics chief, will assume the role by April 19, it said. He will report to Kevin Johnson, who is president of the Platform Services Division.

Nadella will be temporarily replaced in the Dynamics division by corporate vice president Tami Reller. She would fill the position until Microsoft is able to find a replacement.

One change to the overall strategy will be the separation of Live Search from the rest of the Windows Live products. While senior vice president Steven Sinofsky will still lead Windows and Windows Live Engineering, he will no longer have control of the search product.

What this means for the product is unclear: following the massive reorganization in September 2005, Microsoft aimed to streamline its business under logical chains of command. Why Microsoft removed Windows Live Search from the rest of the Live services is a question to which many company watchers don't know the answer.

Some analysts speculate that Microsoft is beginning to demand results on its search expenditures, and looking for the best way to stop the continuing decline in its market share. Others say it may have been due to Sinofsky's workload.

"I think Microsoft is looking for the silver bullet to jumpstart its Live Search business," Microsoft watcher Mary Jo Foley said. "I think it makes sense for Microsoft to pay more attention to Live Search by breaking it away from the rest in terms of its engineering and development."

"Search is the future for Microsoft and the crux of all other Live services," Foley continued. "It needs to have more priority and focus."