Ballmer's ascension sparks questions on Gates' future

Ballmer's ascension sparks questions on Gates' future

Steve Ballmer was named president of software giant Microsoft on Tuesday, but it was chairman Bill Gates' future that was in question.

The promotion of Ballmer, who was executive vice president of sales and support, will give Gates "more time to focus on Microsoft's long-term vision and product strategy", such as user-interface and knowledge-management issues, speech recognition, Windows NT scalability and other challenges facing Microsoft.

Gates spent the lion's share of a 30-minute conference call on Ballmer's promotion Tuesday insisting it did not mean he was scaling back his involvement at the company.

"In no way am I pulling back," Gates said. "The hours I put in, and my enjoyment of the work I do, will be exactly the same. I won't be [active] as much in the day-to-day things, but that just means I'll be using my time in a way that's best for the company."

Ballmer - who has worked with Gates at Microsoft for 18 years and had been viewed as the company's number two person even before becoming president - said he was "excited" to take on the additional responsibility.

"We want to continue to make this the place where the best software talent in the world wants to be and do their best work," Ballmer said.

The two said Ballmer's appointment had nothing to do with current issues dogging Microsoft, such as the US Department of Justice's antitrust lawsuit, Sun Microsystems' lawsuit over Microsoft's Java license or the cool reception Windows 98 has received in its first month on the market.

"The majority of my time will be spent with our product groups, devising the technologies and products of the future," Gates said in a memo to Microsoft employees that the company released. "We can all be incredibly proud of what we've built so far. But the future opportunities will far surpass everything we've achieved to date. I'm more enthusiastic about and committed to Microsoft than I've ever been."

Nevertheless, the timing of the announcement raised eyebrows.

"Despite what Bill says, there might be more of a DoJ aspect to this," said Dwight Davis, an analyst at Summit Strategies. "They're probably also thinking that they need to start making a clear line of succession to ease into a post-Gates Microsoft, and they're making clear that the succession lineage leads to Ballmer.

"There has been some concern in the industry about Microsoft continuing with its very aggressive business practices, and under Steve Ballmer, not known to be a shrinking violet, the people hoping for moderation in Microsoft's practices are probably not expecting that now," Davis said.

Ballmer's old position will be filled by Jeff Raikes, formerly group vice president of sales and marketing.

Again, Gates said the fact that those executives now will report to Ballmer did not reflect a disengagement on his part. "They're going to get more of my time than they've ever gotten," Gates said.

Ballmer, who like Gates is 42 years old, is credited with building Microsoft's customer service model and maintaining long-term relationships with corporate customers. He also had led Microsoft's channel and value chain efforts.

Ballmer is the first person to singularly hold the office of president since Michael Hallman left in 1992. Then, a triad of Microsoft executives, including Ballmer, formed an office of the president. In December of 1996, a nine-member executive committee took over.

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