Microsoft Corp appointed a new head for its mobile phone software group on Monday, as the company continues to search for ways to extend its dominance in the PC market to the fast-growing and highly-competitive smartphone business.

Microsoft Windows Phone Division President Andy Lees, who has led the phone group since 2009, will take a new role at the company that involves working with the company's phone and PC businesses, according to a letter to employees sent by Chief Executive Steve Ballmer on Monday.

Replacing Lees as head of the Windows Phone Division is Terry Myerson, who had previously overseen engineering efforts for the phone group. Myerson will now be responsible for Windows Phone development, marketing and other business functions, wrote Ballmer.

Microsoft's Windows operating system is the most widely used software for the world's personal computers. But the company has struggled to find its footing in the market for Internet-enabled smartphones, where Google Inc's Android and Apple Inc's iOS have become consumer favorites.

Ballmer said that Lees, in his new role, will work for me on a time-critical opportunity focused on driving maximum impact in 2012 with Windows Phone and Windows 8. He did not elaborate on exactly what the position entailed or specify Lees' title.

(Reporting by Alexei Oreskovic; editing by Carol Bishopric)

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