20000115

Gates quites: Ballmer to be Microsoft CEO

LOS ANGELES: The world's richest man got a new job on Thursday.

Microsoft Corp. co-founder Bill Gates handed over the reins of the world's biggest software company to his No. 2, Steve Ballmer, who will take over as chief executive officer.

Gates, 44, who has served as Microsoft's chief since its birth 25 years ago, said he was staying on as chairman. He also crowned himself "chief software architect", a new job in which he will map the company's vision for the Internet age.

"I'm returning to what I love most focusing on technologies for the future," Gates said at a surprise news conference at Microsoft headquarters in Redmond, Wash.

"Steve's promotion will allow me to dedicate myself full time to my passion building great software and strategising on the future, and nurturing and collaborating with the core team helping Steve run the company."

Gates led the company's amazing rise to a business behemoth worth more than $500 billion, and steered it through its turbulent recent history, capped by a federal judge's ruling last November that Microsoft used monopoly powers to harm consumers, competitors and other companies.

As Microsoft's new chief, Ballmer wasted no time in declaring his opposition to any break-up of the world's biggest software company, which is in negotiations with the government in its landmark antitrust case.

The Justice Department favours breaking up Microsoft to settle the case, which alleges the company used monopoly power to drive others out of business, people familiar with mediation talks taking place in Chicago have said.

"I think it would be absolutely reckless and irresponsible for anyone to try and break up this company," Ballmer said.

In a teleconference, Ballmer said he believed the talk of a break-up was purposely leaked by Justice Department officials in hopes of pressuring Microsoft to settle quickly.

"I believe the leaks are deliberate. I don't think there's any doubt about that," Ballmer said.

Gates, whose 15 percent stake in Microsoft makes him the world's richest man with a fortune valued at more than $80 billion, said he also firmly opposed splitting up the company.

"It makes no sense for consumers," a relaxed and smiling Gates told the CNBC financial network. "I'm surprised people can keep a straight face when they say that would be a proper thing to do."

On CNBC, President Bill Clinton called Gates "a genius with technology," but declined to be drawn out on the antitrust case.

"Well, I think it's a very interesting move by him (Gates). Ballmer's obviously a very able man and Gates is a genius with technology. So it'll be interesting to see what happens," Clinton said.

Ballmer, Gates and other Microsoft executives dismissed speculation by analysts that news of the leadership change was timed so Microsoft could respond to the talk of a break-up.

"Obviously, this has nothing to do with that. We've been on a trajectory of this kind for the last several months," Ballmer said.

Ballmer will take over the day-to-day business operations of the company, coordinating work among Microsoft's line-up of products and development teams, but analysts said the announcement only formalised the de facto arrangement in Redmond.

"This really completes the transition. There is nothing shocking about it," said J.P. Morgan analyst William Epifanio.

"This is a good change. Microsoft faces a lot of challenges going forward, and Ballmer is a terrific manager, really, with a personality more suited to the chief executive's job than Bill Gates," Epifanio said.

Rob Enderle, an analyst with Giga Information Group, concurred, saying, "Bill was bored."

"It's been clear for a while that he was not enjoying his job. Steve has really been the driving force inside the company anyway he likes people and he's very gregarious. Bill isn't. This lets him phase his way out at a time when the company is on top."

For his part, Gates said he now would concentrate on issues of "software architecture" and his role as chairman overseeing the company's operations. He said he remained committed to devoting his full time to the company.

"It's been a great 25 years, but the most exciting part of my career is still ahead of me," he said.

At the heart of Microsoft's strategy would be software applications and services that would run not only on the familiar desktop computer but also on new devices such as handheld computers and household appliances, Gates said.

"We want to focus in on certain key home and consumer scenarios, mobile scenarios, the knowledge worker and the small business," Gates said.

Microsoft said the transition would take place surrounding the release next month of its new Windows 2000 operating system the successor of its NT system, aimed at office and professional users.

Ballmer's appointment as CEO is effective immediately, and he will become a member of Microsoft's board of directors, effective Jan. 27.

Microsoft stock, which gained 2 to 107-13/16 on Nasdaq, rose to 108 in after-hours trading following the announcement, which came after the close of regular trading.-Reuters