Microsoft has conducted an executive shakeup in its Windows Phone division, raising speculation about whether its head, Andy Lees, was promoted or demoted. Terry Myerson, who lead the division's engineering efforts, is the head honcho now. Lees assumed the position of president just 14 months ago. In an email, CEO Steve Ballmer said Lees will:

...move to a new role working for me on a time-critical opportunity focused on driving maximum impact in 2012 with Windows Phone and Windows 8. We have tremendous potential with Windows Phone and Windows 8, and this move sets us up to really deliver against that potential.

Lees will retain the title of president, though Ina Fried at All Things Digital says it's not clear who will report to him. Fried reports Lees will focus on ways Microsoft can work across multiple types of computing devices. At ZDNet, Mary-Jo Foley has reported rumors of a project to switch out the Windows Phone kernel and use Windows 8 instead, without putting the entire PC operating system inside a phone. Microsoft isn't acknowledging that any such project exists.