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…or is he??

Thursday January 13 7:50 PM ET

Gates Names Ballmer Microsoft CEO


REDMOND, Wash. (AP) – Microsoft chairman Bill Gates on Thursday promoted his longtime friend and company president, Steve Ballmer, to chief executive officer of the software giant that Gates co-founded.

Gates, who is stepping aside as chief executive, will remain chairman and will also take over the newly created position of “chief software architect.”

Gates is taking the action so he can return “to what I love most – focusing on technologies for the future,” he said. Over the past year and a half, Gates has turned over much of the day-to-day operations of Microsoft to Ballmer.

Though Gates has focused more of his efforts on his vision for Microsoft and the computer industry in recent months, Thursday’s announcement did not necessarily mean he is giving up any power in the company he co-founded in 1975 with Paul Allen.

Microsoft has made Gates the wealthiest private individual in the world, with a fortune estimated at over $80 billion. Meanwhile, his company has become the dominant force in the software industry, with its Windows operating systems on more than 90 percent of personal computers.

Gates said he planned to dedicate all of his time to fashioning and promoting the “next generation” of Microsoft’s flagship product operating system. The latest version, Windows 2000 for business computers, is being released in the next few weeks.

Gates said he especially wants to develop software services that will be hosted on the Internet and made part of future versions of Windows.

Microsoft is working to make its popular software, especially its Office suite of business programs, available over the Internet, in addition to the traditional way of loading it onto individual personal computers.

Gates described the move as “a personal decision, one I have discussed with Steve and our board of directors for some time.

“Steve’s promotion will allow me to dedicate myself full time to my passion – building great software and strategizing on the future and nurturing and collaborating with the core team helping Steve run the company.

Ballmer will retain his title of president. He also will be given a seat on Microsoft’s board of directors effective Jan. 27.

“I’m certainly honored and very, very excited about the opportunity,” Ballmer said.

David Wu, a financial analyst at ABN Amro in San Francisco, said there are few differences between Ballmer and Gates.

“Other than the fact that Steve Ballmer is less rich than Bill Gates, those two are Siamese twins,” Wu said.

Ballmer, like Gates, has already staked out a position against breaking up the company, a possible remedy which may be sought by the federal government and 19 states that are suing Microsoft over alleged antitrust violations.

“I think it would be absolutely reckless and irresponsible for anyone to try to break up this company,” Ballmer said. “I think it would be unprecedented and I think it would be the single greatest disservice that anybody could do to consumers in this country … I just think it would be reckless beyond belief.”

Ballmer, 43, was appointed president of Microsoft in July 1998, giving him direct responsibility for improving the performance of all of the company’s divisions, as well as customer satisfaction.

The son of Swiss immigrants, Ballmer grew up in Detroit, where his father worked for Ford Motor Co (NYSE:F – news).

He was brought into the company in 1980, by Gates, whom he met and became friends with when both attended Harvard University in the 1970s. Ballmer was Gates’ best man when he married Melinda French in 1994.

After Gates hired Ballmer, the two reportedly had some rocky times. One anecdote says that in the spring of 1985, as Microsoft’s deadline to produce Windows slipped further and further behind, Gates called Ballmer into his office and threatened to fire him if Windows wasn’t on the shelves by the end of the year (although few people believe Gates, with a notoriously bad temper, was ever serious about firing Ballmer). Windows was ready by November.

Along with Ballmer’s promotion, Gates announced that Microsoft would develop the Next Generation Windows Services, which will power new products and services over the Internet. Microsoft wants to use the Internet to transmit data to any device, including computers, cell phones, handheld computers, home electronics – and gear that has not yet been invented.

The new Internet-based Windows services will be developed over the next two or three years, with developers getting the first detailed view of Microsoft’s strategy this spring, Gates said.

The announcement came after regular trading had finished on the Nasdaq Stock Market, where shares of Microsoft rose $2 to $107.811/4.

In after-hours trading, shares were drifting slightly lower, trading around $107.