It has taken a while, but with a continuing investigation by the Norwegian police and restating of earnings over 2006/2007, Microsoft is cutting itself loose from any ties to possible fraudulent behavior at Fast Search & Transfer, now a wholly-owned Microsoft subsidiary. As Norwegian newspaper DN reports today, former CEO John Lervik, who was Corporate Vice President of the Microsoft Enterprise Search Group after the acquisition, has resigned.
Microsoft issued a statement saying that "a thorough review of past financial practices, which led to changes in the company's accounts from 2006 and 2007, has been conducted to prevent such problems from happening again. Now that this process is over, Lervik has chosen to resign from FAST." Lervik himself cites personal reasons, saying that the job and travel were taking his toll on his personal life.
Norwegian financial analysts said that though it's hard to tell whether Lervik himself was actively involved in any financial hanky-panky, as CEO he was responsible, and they were surprised it has taken this long before any of the former management took any blame and resigned.
The challenge for Microsoft going forward is to hang on to the knowledge in their Norwegian "Search Expertise Center." We've heard rumblings from the company all year long, and many FAST employees have already left, including most of the sales staff. FAST still boasts having some 70 PhDs on the payroll. Bjørn Olstad (current CTO) will be taking over Lervik's duties, which may suggest that Microsoft is now cutting back the FAST organization to the core of what it actually wanted to acquire: the ESP technology, and the expertise in enterprise search from the development team.
[UPDATE 1/26: As Dave Kellogg points out, "Lervik's resignation came almost one year to the day since the acquisition. [...] this line of reasoning leads you to conclude that Lervik didn't like it at Microsoft and had to work through a one-year retention agreement before resigning." And Dave's quite right in mentioning Occam's Razor here -- there's been so much fuss about FAST's accounting practices it's easy to miss what may be the most obvious explanation for Lervik's resignation.]
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