CEO Ballmer retires as Microsoft struggles to modernize

CEO Ballmer retires as Microsoft struggles to modernize
Microsoft CEO Steve Ballmer arrives for the launch of Windows 8 operating system in New York in this file photo.

NEW YORK - Steve Ballmer, a passionate salesman who has been a central figure at Microsoft Corp for more than three decades, unexpectedly announced his retirement as chief executive on Friday, ending a controversial 13-year reign in which the world's largest software company lost its position as the dominant force in computing.

The surprise move sent the company's share price up 7 per cent, reflecting a widespread view that Ballmer is not the man to reverse the fortunes of a company that remains highly profitable but has failed to navigate the transition to the mobile computing era.

Ballmer's planned exit comes just weeks after the company announced a major reorganisation and delivered an earnings report that showed across-the-board weakness in the business, including dismal sales of the company's new Surface tablet and a lukewarm reaction to the crucial Windows 8 operating system.

Microsoft said it had engaged the executive search firm Heidrick & Struggles and would consider both internal and external candidates to succeed Ballmer - underscoring the lack of a succession plan at a company where many talented executives have been squeezed out over the years. Ballmer will stay on for up to a year until a new CEO is found.

A close friend and confidant of co-founder Bill Gates since the company's earliest days, the 57-year-old Ballmer formally notified the company two days ago of his intention to retire, according to a regulatory filing. In an interview with the trade publication ZD Net, director John Thompson said the search for a successor had in fact been underway for some time.

"We are well down the path in the search," said Thomson, who is leading a search committee that also includes Gates.

Still, the timing of the announcement and the lack of a succession plan suggest the recent setbacks may have spurred the company's board to act. Gates remains chairman of the board, which has historically followed his lead.

Ballmer himself acknowledged his decision was abrupt.

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