Kevin Johnson, a Microsoft veteran and one of the key players in the software giant's failed $47.5 billion (£23.9 billion) bid to buy Yahoo!, is leaving as the company attempts to re-energise its flagging internet business.

Mr Johnson has been with Microsoft for 16 years and became president of the group's platforms and services division in 2005.

Microsoft announced Mr Johnson’s unexpected departure late last night as it gave details of a major reorganisation of the company, including splitting Mr Johnson’s platform and services division in two.

The new departments — Windows/Windows Live and Online Services — will both report directly to Steve Ballmer, Microsoft’s chief executive.

Analysts say the senior management shake-up reveals the extent of the company’s disarray following the failed Yahoo bid and reflects Mr Ballmer’s dissatisfaction with the company’s current online strategy.

Mr Johnson, 47, was the public face of the company’s search and online advertising strategy, and oversaw Microsoft’s Windows operating system and Windows Live programmes, such as Web e-mail and instant messaging.

Considered Mr Ballmer’s right-hand man, Mr Johnson was tasked with helping Microsoft to catch market leader Google. Last November, he set the goal of capturing 30 per cent of US search queries. However, Microsoft still lies a poor third to Google and Yahoo!.

Despite heavy spending, including a $6 billion acquisition of aQuantive, the online advertising company, which Mr Johnson led last year, Microsoft has failed to move up the ranks.

Reporting second-quarter results last week, the group said its online business loss more than doubled to $488 million compared with the year before, despite revenue increasing by 24 per cent.

It also warned of a “tough environment” and a “difficult” internet advertising market.

Mr Johnson, who joined Microsoft in 1992, will become chief executive at Juniper Networks, the Silicon Valley-based network equipment maker, in September.

Microsoft's newly formed Windows/Windows Live division will be led by senior vice presidents Steven Sinofsky, Jon DeVaan and Bill Veghte.

Microsoft said it would “create a new senior lead position and will conduct a search that will span internal and external candidates.”