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Gates quits CEO post at Microsoft; Gates stepping down as CEO
Boston Herald
Page 027
(Copyright 2000)

Microsoft Corp. Chairman Bill Gates stepped back to his geek roots yesterday, relinquishing his CEO's title and day-to-day control of the world's largest software company to second-in-command Steve Ballmer.

Gates, who has been sharply critical of the on-going antitrust case against Microsoft and has served as a lightning rod for Microsoft critics, gave no hint that his move was made to deflect a reported plan by the Justice Department to break the giant company into three parts.

Asked if that were a motive for yesterday's announcement, Ballmer took the microphone.

"I think it'd be absolutely reckless and irresponsible for anyone to try and break up this company," Ballmer said. "I think it'd be the biggest disservice anyone could do to consumers in this country."

Industry observers, however, disagreed on what motivated Gates and Ballmer to unveil the management change yesterday.

"To some extent, it was a reaction to the story we've seen the last few days that the Department of Justice plans to propose a break- up of Microsoft," said Nicholas Economides , an economics professor at New York University's Leonard N. Stern School of Business.

Jonathan Zuck, president of The Association for Competitive Technology in Washington, said he didn't see the move as a deflection strategy.

"They haven't shown themselves to be masters of media management," Zuck said. "The management change was something to reassure stockholders and customers: Despite what's going on, they remain focused on their core business.-"

Ballmer and Gates mostly discussed how they would execute Microsoft's next vision.

When asked which of their competitors should be most concerned, Ballmer said, "It should concern all of them."

Gates will remain chairman and take on the new title of "chief software architect," saying he plans to dedicate his time working on the developing new computer technology.

"I might be threatening to write (software) code again," Gates joked.

Gates, 44, is the richest man in the world, largely due to his stake of about 15 percent in Microsoft. He co-founded Microsoft with friend Paul Allen in 1975, and has run the software giant since its inception.

Ballmer joined Microsoft in 1980 and became president in July 1998. Gates said Ballmer also will become a Microsoft director on Jan. 27.

Ballmer, 43, is ranked as the fourth-richest American, according to Forbes magazine, primarily from his almost 5 percent stake in Microsoft. He attended Harvard University with Gates and graduated with a degree in applied math and economics.

Ballmer has spearheaded Microsoft's efforts to be more responsive to customers' needs and new technologies. He's held several positions since joining Microsoft in 1980, including executive vice president of sales and support. Prior to joining Microsoft, he was an assistant product manager at Procter & Gamble Co.

When asked how Microsoft would respond to the merger of America Online Inc. and Time Warner Inc., Ballmer simply said: "Our business is software."

"I don't anticpate the need of megamergers to get that done," Ballmer continued. "They didn't acquire a lot of software designers this week."


Caption: WINDOWS OF OPPORTUNITY: Steve Ballmer, left, the second-in- command at Microsoft will become CEO. Bill Gates, right, will remain chairman and take the additional title of "chief software architect." AP PHOTO

Copyright © 2000 Dow Jones & Company, Inc. All Rights Reserved.