CEO Ballmer to leave Microsoft in 12 months

Microsoft informed that Steve Ballmer would most likely retire as its chief executive within the next 12 months, sending its stock soaring by more than 7% in early trading. Bill Gates, Microsofts founder and chairman, will form part of the succession planning committee to find his replacement.

“There is never a perfect time for this type of transition, but now is the right time,” Mr Ballmer said. “We have embarked on a new strategy with a new organisation and we have an amazing senior leadership team. 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. We need a CEO who will be here longer term for this new direction.”

Ballmer said he is retiring earlier than he originally expected because his initial plans would have put his retirement in the middle of the technology company’s largely planned transformation. He said stepping down now allows a new CEO to lead the company in a new direction.

Since Ballmer took charge of Microsoft, shareholders have had a negative total return of nearly 20%, with the stock down 36%, according to data from FactSet. While some of that decline can be attributed to the tech sector’s rapid descent from the heights of the dot-com bubble, Microsoft has frustrated investors for years with its inability to transform a massive cash generation machine into stock market performance.

In an email to staff released by Microsoft, Mr Ballmer said that he was “proud of what we have achieved”, after seeing the company rise from $7.5 million in revenues and 30 employees to $78 billion and 100,000 staff today.

“We have more than 1 billion users and earn a great profit for our shareholders,” he said cited by Financial Times. “We have delivered more profit and cash return to shareholders than virtually any other company in history.”

Analysts at Gartner have predicted that Apples share of the markets including PCs, smartphones and tablets, will overtake Microsofts this year, having in mind the struggle that Windows faces for relevance in the mobile device segment.

According to IDC, Windows Mobile held a 3.7% market share of the smartphone market in the second quarter of 2013, compared with Google Androids 79.3%.