Ultimate TV faces reorg

Staffers pinkslipped, reassigned

By MARC GRASER

Microsoft's UltimateTV division is going under the knife, with one-third of its 500 staffers receiving pinkslips Tuesday and other employees being reassigned to the software giant's television or vidgame arms.

Move, which aims to pair UltimateTV with Microsoft's entertainment and TV efforts, means UltimateTV will no longer be a part of the Microsoft TV division, instead becoming part of a new television services group within Microsoft's MSN arm.

Jon DeVaan, senior veep of Microsoft TV, will ankle after the restructuring of UltimateTV, with Moshe Lichtman taking his place. WebTV co-founder Bruce Leak will lead the television services group.

The UltimateTV service, which offers digital video recording similar to TiVo and Web surfing via satcaster DirecTV, bowed about a year ago. It will continue to be available after the restructuring. Microsoft has yet to reveal how many subscribers UltimateTV has attracted.

Service is Microsoft's second interactive TV offering to struggle to attract subscribers. UltimateTV was launched after the introduction of MSN TV, formerly called WebTV, which offers email access via a set-top box. MSN TV has hovered at roughly 1 million subs for several years.

The 168 affected staffers at UltimateTV have three months to find other jobs within Microsoft or receive severance packages. The remaining two-thirds of the employees will be reassigned to jobs within the MSN, Xbox or Microsoft TV divisions.

The UltimateTV hardware group will join Microsoft's Xbox team, which suggests the new high-end vidgame console could incorporate digital video recording in the near future.