Steve Ballmer, the chief executive officer of Microsoft, has announced he will retire sometime within the next year. After the announcement, Microsoft shares saw a 7 percent jump in value.
Ballmer said, “There is never a perfect time for this type of transition, but now is the right time. We have embarked on a new strategy with a new organization and we have an amazing senior leadership team.”
Just a month ago Microsoft unveiled its latest reorganization with the hopes of better aligning the company’s new corporate strategy with its organizational structure. Ballmer has indicated that he wants Microsoft to transition itself into a “devices and services” company that focuses on making hardware, online services and apps that work together without any difficulty and across multiple gadgets and screens.
Admitting he had planned to retire during the company’s latest transition plan, Ballmer said he believed the company needed a CEO for the longer term who could see Microsoft through the restructuring process. A successor for Ballmer has not been named, but it is known that Microsoft’s founder and chairman, Bill Gates, will be actively involved in the hiring process.
Gates had said he will be working closely with the board members to find a “great new CEO.” He said the company is fortunate to have Ballmer in the role until the new CEO assumes duties.
Ballmer has been criticized by investors for failing to prepare a successor. Experts believe every Microsoft executive who was in line for the position has either retired or been forced out of the company. Windows Chief Steve Sinofsky and Software Chief Ray Ozzie are two of those examples.
One obvious CEO candidate appears to be Devices Chief Julie Larson-Green, but many analysts are urging the company to hire an external candidate that could help the company transition away from the PC and on to other devices.
Ballmer took over his challenging role as CEO from Gates back in 2000. Microsoft was once the most valuable company in the world, but in the last decade it has lost more than half of its market value. It has wavered between $25 and $35 per share during that time period. Investors have criticized Ballmer for failing to anticipate the revolution of mobile computing, as Microsoft trails Apple and Google in mobile software and devices.
Late attempts to get into the mobile arena have failed, as the Windows Phone, despite critical acclaim, has not had good success with the consumer base. Then the company’s Surface tablet, the first PC with Microsoft’s own design, had such sluggish sales that the company was forced to take a write-down of more than $900 million on excess inventory of the tablet. Microsoft also had a failed attempt in the MP3 market with a device called Zune. Microsoft has been unable to reap profits from its Bing search engine and other online properties despite a search partnership with Yahoo.
Ballmer was one of the first 30 employees to join Microsoft, and he and Gates have been lifelong friends. Despite the challenges, Microsoft has supported Ballmer throughout his tenure.
In a letter to employees, Ballmer wrote, “This is an emotional and difficult thing for me to do. I take this step in the best interests of the company I love; it is the thing outside of my family and closest friends that matters to me most.”
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