Microsoft CEO Ballmer to retire within 12 months

1 of 2. Microsoft CEO Steve Ballmer arrives for the launch of Windows 8 operating system in New York, in this file photo from October 25, 2012.

Credit: Reuters/Lucas Jackson/Files

By Bill Rigby

SEATTLE/NEW YORK | Fri Aug 23, 2013 6:04pm EDT

SEATTLE/NEW YORK (Reuters) - 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 percent, 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 reorganization 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.

"There is never a perfect time for this type of transition, but now is the right time," he wrote in a memo to employees. "This is an emotional and difficult thing for me to do. I take this step in the best interests of the company I love."

Ballmer has faced criticism from investors for years as rivals led by Apple Inc and Google Inc came to dominate huge new markets in smartphones, tablets, Internet search and cloud computing even as Microsoft remained reliant on the traditional personal computer.

Activist investing fund ValueAct Capital Management LP said in April that it had taken a stake in the company and shortly after began agitating for a change in strategy and a clear CEO succession plan.

Microsoft, like Apple, has been under pressure from shareholders to hand back more of its cash hoard, which now totals $77 billion.

"This might accelerate more shareholder-friendly capital returns of that cash treasure trove, which would help in the revaluation of the stock to more appropriate levels," said Todd Lowenstein at fund firm HighMark Capital Management, which holds Microsoft shares.

There are no obvious candidates to succeed Ballmer at a company that has only had two CEOs in its 38-year history. Ballmer had once indicated that he intended to stay at least until 2017.

Ballmer can claim some important successes: revenue tripled during his tenure, profits doubled, and the company scored a big success with the Xbox videogame business. The Windows and Office franchises remain highly profitable, and Microsoft is well-entrenched as a vendor of corporate computing products and services.

At the same time, though, repeated forays into mobile phones, tablets and music players have come to grief. The Surface tablet, aimed at the hugely successful iPad, alienated longtime hardware partners even as it failed to generate significant sales, and a phone partnership with Nokia has thus far yielded little for either company.

At the same time, the company has lost billions trying to compete with Google in the Internet search business. Some of Microsoft's corporate computing businesses are also under threat from the industry-wide transition to cloud-based services.

The recent reorganization was aimed at reshaping Microsoft - once primarily a purveyor of packaged software - into a company focused on devices and services, essentially mimicking Apple.

Yet most industry watchers felt it was too little, too late, with some calling on the company to back away from the consumer products sector and focus on serving businesses.

In the ZD Net interview, Ballmer rejected that approach. "Nobody has ever managed to figure out how to build a device for a user that was just enterprise or just consumer," he said. "These core experiences do span 'consumer and enterprise.'"

PASSION AT THE TOP

Ballmer, a forceful, often emotional leader, was regarded a great salesman rather than a brilliant technologist.

A physically imposing presence with a booming voice, his motivational efforts were the stuff of legend: a clip of a semi-hysterical Ballmer screeching and dancing around the stage to rally Microsoft employees has been viewed nearly five million times on YouTube.

Yet the antics sometimes acquired an air of desperation as Apple and other rivals produced industry-changing innovations that Microsoft couldn't match.

"That is the most expensive phone in the world and it doesn't appeal to business customers," Ballmer laughed in a TV interview after the launch of Apple's iPhone in 2007. Five years later, iPhone sales alone were greater than Microsoft's overall revenue.

A Michigan native, Ballmer studied applied mathematics and economics at Harvard, where he met Gates. Several years later Gates persuaded him to drop out of Stanford Business School to become Microsoft's first commercial manager and the company's 30th employee.

To induce him, Gates offered Ballmer part ownership of the company, and when Microsoft incorporated a year later, Ballmer had almost an 8 percent stake. That formed the foundation of his wealth which is now valued at $15 billion by Forbes magazine.

Ballmer remains one of the largest holders of Microsoft stock, with about four percent of the company. His net worth, ironically, soared by nearly a billion dollars on Friday as the stock market celebrated his departure.

Microsoft shares closed up 7.3 percent at $34.75 on Nasdaq on Friday.

(Additional reporting by Nicola Leske, Sinead Carew and Liana Baker in New York; Writing by Jonathan Weber. Editing by Jeffrey Benkoe, Lisa Von Ahn and Bernard Orr)

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Microsoft CEO Ballmer to retire within 12 months

1 of 2. Microsoft CEO Steve Ballmer arrives for the launch of Windows 8 operating system in New York, in this file photo from October 25, 2012.

Credit: Reuters/Lucas Jackson/Files

By Bill Rigby

SEATTLE/NEW YORK | Fri Aug 23, 2013 6:04pm EDT

SEATTLE/NEW YORK (Reuters) - 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 percent, 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 reorganization 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.

"There is never a perfect time for this type of transition, but now is the right time," he wrote in a memo to employees. "This is an emotional and difficult thing for me to do. I take this step in the best interests of the company I love."

Ballmer has faced criticism from investors for years as rivals led by Apple Inc and Google Inc came to dominate huge new markets in smartphones, tablets, Internet search and cloud computing even as Microsoft remained reliant on the traditional personal computer.

Activist investing fund ValueAct Capital Management LP said in April that it had taken a stake in the company and shortly after began agitating for a change in strategy and a clear CEO succession plan.

Microsoft, like Apple, has been under pressure from shareholders to hand back more of its cash hoard, which now totals $77 billion.

"This might accelerate more shareholder-friendly capital returns of that cash treasure trove, which would help in the revaluation of the stock to more appropriate levels," said Todd Lowenstein at fund firm HighMark Capital Management, which holds Microsoft shares.

There are no obvious candidates to succeed Ballmer at a company that has only had two CEOs in its 38-year history. Ballmer had once indicated that he intended to stay at least until 2017.

Ballmer can claim some important successes: revenue tripled during his tenure, profits doubled, and the company scored a big success with the Xbox videogame business. The Windows and Office franchises remain highly profitable, and Microsoft is well-entrenched as a vendor of corporate computing products and services.

At the same time, though, repeated forays into mobile phones, tablets and music players have come to grief. The Surface tablet, aimed at the hugely successful iPad, alienated longtime hardware partners even as it failed to generate significant sales, and a phone partnership with Nokia has thus far yielded little for either company.

At the same time, the company has lost billions trying to compete with Google in the Internet search business. Some of Microsoft's corporate computing businesses are also under threat from the industry-wide transition to cloud-based services.

The recent reorganization was aimed at reshaping Microsoft - once primarily a purveyor of packaged software - into a company focused on devices and services, essentially mimicking Apple.

Yet most industry watchers felt it was too little, too late, with some calling on the company to back away from the consumer products sector and focus on serving businesses.

In the ZD Net interview, Ballmer rejected that approach. "Nobody has ever managed to figure out how to build a device for a user that was just enterprise or just consumer," he said. "These core experiences do span 'consumer and enterprise.'"

PASSION AT THE TOP

Ballmer, a forceful, often emotional leader, was regarded a great salesman rather than a brilliant technologist.

A physically imposing presence with a booming voice, his motivational efforts were the stuff of legend: a clip of a semi-hysterical Ballmer screeching and dancing around the stage to rally Microsoft employees has been viewed nearly five million times on YouTube.

Yet the antics sometimes acquired an air of desperation as Apple and other rivals produced industry-changing innovations that Microsoft couldn't match.

"That is the most expensive phone in the world and it doesn't appeal to business customers," Ballmer laughed in a TV interview after the launch of Apple's iPhone in 2007. Five years later, iPhone sales alone were greater than Microsoft's overall revenue.

A Michigan native, Ballmer studied applied mathematics and economics at Harvard, where he met Gates. Several years later Gates persuaded him to drop out of Stanford Business School to become Microsoft's first commercial manager and the company's 30th employee.

To induce him, Gates offered Ballmer part ownership of the company, and when Microsoft incorporated a year later, Ballmer had almost an 8 percent stake. That formed the foundation of his wealth which is now valued at $15 billion by Forbes magazine.

Ballmer remains one of the largest holders of Microsoft stock, with about four percent of the company. His net worth, ironically, soared by nearly a billion dollars on Friday as the stock market celebrated his departure.

Microsoft shares closed up 7.3 percent at $34.75 on Nasdaq on Friday.

(Additional reporting by Nicola Leske, Sinead Carew and Liana Baker in New York; Writing by Jonathan Weber. Editing by Jeffrey Benkoe, Lisa Von Ahn and Bernard Orr)

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Microsoft CEO Ballmer to retire within 12 months

1 of 2. Microsoft CEO Steve Ballmer arrives for the launch of Windows 8 operating system in New York, in this file photo from October 25, 2012.

Credit: Reuters/Lucas Jackson/Files

By Bill Rigby

SEATTLE/NEW YORK | Fri Aug 23, 2013 6:04pm EDT

SEATTLE/NEW YORK (Reuters) - 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 percent, 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 reorganization 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.

"There is never a perfect time for this type of transition, but now is the right time," he wrote in a memo to employees. "This is an emotional and difficult thing for me to do. I take this step in the best interests of the company I love."

Ballmer has faced criticism from investors for years as rivals led by Apple Inc and Google Inc came to dominate huge new markets in smartphones, tablets, Internet search and cloud computing even as Microsoft remained reliant on the traditional personal computer.

Activist investing fund ValueAct Capital Management LP said in April that it had taken a stake in the company and shortly after began agitating for a change in strategy and a clear CEO succession plan.

Microsoft, like Apple, has been under pressure from shareholders to hand back more of its cash hoard, which now totals $77 billion.

"This might accelerate more shareholder-friendly capital returns of that cash treasure trove, which would help in the revaluation of the stock to more appropriate levels," said Todd Lowenstein at fund firm HighMark Capital Management, which holds Microsoft shares.

There are no obvious candidates to succeed Ballmer at a company that has only had two CEOs in its 38-year history. Ballmer had once indicated that he intended to stay at least until 2017.

Ballmer can claim some important successes: revenue tripled during his tenure, profits doubled, and the company scored a big success with the Xbox videogame business. The Windows and Office franchises remain highly profitable, and Microsoft is well-entrenched as a vendor of corporate computing products and services.

At the same time, though, repeated forays into mobile phones, tablets and music players have come to grief. The Surface tablet, aimed at the hugely successful iPad, alienated longtime hardware partners even as it failed to generate significant sales, and a phone partnership with Nokia has thus far yielded little for either company.

At the same time, the company has lost billions trying to compete with Google in the Internet search business. Some of Microsoft's corporate computing businesses are also under threat from the industry-wide transition to cloud-based services.

The recent reorganization was aimed at reshaping Microsoft - once primarily a purveyor of packaged software - into a company focused on devices and services, essentially mimicking Apple.

Yet most industry watchers felt it was too little, too late, with some calling on the company to back away from the consumer products sector and focus on serving businesses.

In the ZD Net interview, Ballmer rejected that approach. "Nobody has ever managed to figure out how to build a device for a user that was just enterprise or just consumer," he said. "These core experiences do span 'consumer and enterprise.'"

PASSION AT THE TOP

Ballmer, a forceful, often emotional leader, was regarded a great salesman rather than a brilliant technologist.

A physically imposing presence with a booming voice, his motivational efforts were the stuff of legend: a clip of a semi-hysterical Ballmer screeching and dancing around the stage to rally Microsoft employees has been viewed nearly five million times on YouTube.

Yet the antics sometimes acquired an air of desperation as Apple and other rivals produced industry-changing innovations that Microsoft couldn't match.

"That is the most expensive phone in the world and it doesn't appeal to business customers," Ballmer laughed in a TV interview after the launch of Apple's iPhone in 2007. Five years later, iPhone sales alone were greater than Microsoft's overall revenue.

A Michigan native, Ballmer studied applied mathematics and economics at Harvard, where he met Gates. Several years later Gates persuaded him to drop out of Stanford Business School to become Microsoft's first commercial manager and the company's 30th employee.

To induce him, Gates offered Ballmer part ownership of the company, and when Microsoft incorporated a year later, Ballmer had almost an 8 percent stake. That formed the foundation of his wealth which is now valued at $15 billion by Forbes magazine.

Ballmer remains one of the largest holders of Microsoft stock, with about four percent of the company. His net worth, ironically, soared by nearly a billion dollars on Friday as the stock market celebrated his departure.

Microsoft shares closed up 7.3 percent at $34.75 on Nasdaq on Friday.

(Additional reporting by Nicola Leske, Sinead Carew and Liana Baker in New York; Writing by Jonathan Weber. Editing by Jeffrey Benkoe, Lisa Von Ahn and Bernard Orr)

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Microsoft CEO Ballmer to retire within 12 months

1 of 2. Microsoft CEO Steve Ballmer arrives for the launch of Windows 8 operating system in New York, in this file photo from October 25, 2012.

Credit: Reuters/Lucas Jackson/Files

NEW YORK | Fri Aug 23, 2013 10:34am EDT

NEW YORK (Reuters) - Microsoft Corp Chief Executive Steve Ballmer unexpectedly announced his retirement on Friday, ending a controversial 13-year reign at the head of the world's largest software company and sending the company's shares up 7.1 percent.

Ballmer, 57, took over from co-founder Bill Gates in January 2000, but his leadership was questioned throughout his tenure by Wall Street and Silicon Valley, as Microsoft's stock price floundered and the PC-centric pioneer was overtaken by Apple Inc and Google Inc in the shift toward mobile computing.

Ballmer's planned exit comes shortly after activist investing fund ValueAct Capital Management LP took a small stake in the company, and started agitating for a change in strategy and a clear CEO succession plan.

Only last month Ballmer launched a massive reorganization to reshape Microsoft into a company focused on devices and services, essentially mimicking Apple, leaving most industry watchers nonplussed.

"My original thoughts on timing would have had my retirement happen in the middle of our company's transformation to a devices and services company," said Ballmer in a statement. "We need a CEO who will be here longer term for this new direction."

Although Ballmer has faced criticism for some time, his decision to retire surprised analysts.

"Yes, this was a surprise, especially considering how close it is to the recently announced strategic overhaul towards devices and services," said Sid Parakh, an analyst at McAdams Wright Ragen.

Ballmer is to retire within the next 12 months, once a special committee has selected a new CEO.

The committee is to be chaired by John Thompson, the board's lead independent director, and includes Microsoft co-founder and Chairman Bill Gates, as well as other board members Chuck Noski and Steve Luczo.

It will consider both external and internal candidates and work with executive recruiting firm Heidrick & Struggles International Inc, according to Microsoft.

Its shares rose 7.1 percent to $34.69 on Nasdaq.

(Reporting by Sinead Carew and Bill Rigby in Seattle; Editing by Jeffrey Benkoe and Lisa Von Ahn)

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SNB says UBS can repurchase StabFund within three months

An illuminated logo of Swiss bank UBS is pictured on an office building in Lucerne February 16, 2012.

Credit: Reuters/Michael Buholzer

ZURICH | Fri Aug 16, 2013 2:24am EDT

ZURICH (Reuters) - The Swiss National Bank (SNB) said on Friday the stabilization fund it set up five years ago to bail out Swiss bank UBS (UBSN.VX) had repaid the loan granted by the SNB, allowing UBS to go ahead with its plan to repurchase the once-toxic assets.

UBS may now exercise an option to repurchase the StabFund from the SNB. The price will be determined based on the value of the assets in the portfolio that will be valued by independent agents, the Swiss central bank said in a statement.

In autumn 2008, the Swiss government, the Swiss financial markets watchdog and the SNB adopted measures to rescue UBS, the country's biggest bank, including the acquisition of $38.7 billion in illiquid assets by the SNB which have since turned profitable.

The asset valuation and completion of the purchase option transaction are expected to take approximately three months.

In July UBS said it would repay the loan and buy back equity in the fund, adding that the move was expected to bolster its capital.

UBS will have to pay the SNB $1 billion plus half of the fund's net asset value in excess of this amount. The fund's equity amounted to $5.5 billion at the end of 2012.

(Reporting by Silke Koltrowitz; Editing by David Cowell)

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SNB says UBS can repurchase StabFund within three months

An illuminated logo of Swiss bank UBS is pictured on an office building in Lucerne February 16, 2012.

Credit: Reuters/Michael Buholzer

ZURICH | Fri Aug 16, 2013 2:24am EDT

ZURICH (Reuters) - The Swiss National Bank (SNB) said on Friday the stabilization fund it set up five years ago to bail out Swiss bank UBS (UBSN.VX) had repaid the loan granted by the SNB, allowing UBS to go ahead with its plan to repurchase the once-toxic assets.

UBS may now exercise an option to repurchase the StabFund from the SNB. The price will be determined based on the value of the assets in the portfolio that will be valued by independent agents, the Swiss central bank said in a statement.

In autumn 2008, the Swiss government, the Swiss financial markets watchdog and the SNB adopted measures to rescue UBS, the country's biggest bank, including the acquisition of $38.7 billion in illiquid assets by the SNB which have since turned profitable.

The asset valuation and completion of the purchase option transaction are expected to take approximately three months.

In July UBS said it would repay the loan and buy back equity in the fund, adding that the move was expected to bolster its capital.

UBS will have to pay the SNB $1 billion plus half of the fund's net asset value in excess of this amount. The fund's equity amounted to $5.5 billion at the end of 2012.

(Reporting by Silke Koltrowitz; Editing by David Cowell)

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Obama says narrowed Fed choices, to announce in months: NY Times

WASHINGTON (Reuters) - President Barack Obama has narrowed his choices to succeed Federal Reserve Chairman Ben Bernanke to "some extraordinary candidates" and will announce his pick "over the next several months," he said in an interview with the New York Times.

In the interview, released on Saturday, Obama said he wanted a Fed leader who would focus on growing the economy and not just work abstractly to keep inflation in check and markets stable, the Times reported.

(Reporting by Jeff Mason; Editing by Peter Cooney)

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