Gates
Reuters
Gates will be 52 when he steps away from daily operations at Microsoft in July 2008.
msnbc.com staff and news service reports
updated 6/16/2006 1:19:12 AM ET 2006-06-16T05:19:12

Microsoft Corp. Chairman Bill Gates announced Thursday he will transition away from a daily role at the software company he co-founded to focus on the charitable work of the Bill & Melinda Gates Foundation.

Gates, 50, will continue on as the company’s chairman after transferring his duties over a two-year period.

(MSNBC.com is a joint venture of Microsoft and NBC Universal News.)

“This was a hard decision for me,” said Gates, who founded the world’s largest software company with childhood friend Paul Allen in 1975. “I’m very lucky to have two passions that I feel are so important and so challenging. As I prepare for this change, I firmly believe the road ahead for Microsoft is as bright as ever.”

“I’m not leaving Microsoft,” he added.

Gates also said he had no plans to give up the distinction of being the company’s largest shareholder which he enjoys by virtue of his stake of about 1 billion shares or 9.6 percent of the company.

"I’m proud of that,” he said.

Microsoft chief technical officer Ray Ozzie will immediately assume Gate’s title as chief software architect and begin working side by side with Gates on overseeing the technical design of the company's software, Microsoft said.

Craig Mundie, another chief technical officer, takes the new title of chief research and strategy officer and will work closely with Gates to assume his responsibility for the company’s research efforts, the company said. Mundie also will work with the company's general counsel, Brad Smith, on Microsoft’s intellectual property efforts.

Ozzie and Mundie will report directly to Gates at first, and then shift to reporting to chief executive officer Steve Ballmer "at an appropriate time during the two-year transition period," Microsoft said.

“Bill and I are confident we’ve got a great team that can step up to fill his shoes and drive Microsoft innovation forward without missing a beat,” Ballmer said in a statement.

Gates et al
Reuters
Bill Gates with, from left, Microsoft executives Craig Mundie, Ray Ozzie and Steve Ballmer
But in an interview with The Associated Press, he conceded that there was no way to replace Gates.

“If we think anybody gets to be Bill Gates, I don’t think that’s a realistic hypothesis,” he said.

Ozzie, 50, joined Microsoft last year when the software giant acquired his company, Groove Networks. A well-known figure in the software industry, Ozzie worked on the first electronic spreadsheet, VisiCalc, in the early 1980s, and then was responsible for developing Lotus Notes.

Mundie, 56, joined Microsoft in 1992 to create and run its consumer platforms division.

Gates stepped down as chief executive officer in January 2000, handing over the reins to Ballmer, his longtime friend and lieutenant.

Microsoft is among the world's biggest companies with a market capitalization of more than $200 billion and has been a powerful force in the business world at least since the mid-1980s, when its Windows operating system helped popularize personal computers. But the company's stock has been a poor performer in recent years as the company has faced intense challenges from competitors led by Google and Apple Computer, among others.

The company's forthcoming operating system, Windows Vista, is due in stores next January but has been repeatedly delayed. In April, Microsoft shares took their biggest one-day tumble in five years after the company disappointed Wall Street with news of accelerated spending plans.

Ballmer said Thursday he is firmly in control of Microsoft and plans to remain in charge for a “very long time.”

“The company’s got a big and very broad mission. I am excited about that mission. I think we’ll surprise people with how successful we are going to be,” Ballmer told Reuters. “There was a time when we did surprise people."

Ballmer emphasized there will be no power struggle after Gates takes a reduced role at Microsoft. “I’ve really been running the company for six and a half years, so I don’t really anticipate any change internally,” Ballmer said. “People understand that the kinds of things that I am deep in are different from the kinds of things Bill is deep in.”

Gates interjected: “The authority is still the same.”

Thinking back to the company’s modest beginnings, Gates said he never imagined that Microsoft would grow to be a software company employing 63,000 people in more than 100 countries with sales of more than $40 billion.

“It’s interesting that we had such a good vision of the importance of software ... and yet we thought we’d have this modest-sized company,” said Gates. “When we had 100 people, we thought when we have 200 people we can write all the software the world will need.”

Gates, ranked as the world's richest individual with Microsoft stock and other assets valued at $50 billion, reiterated Thursday that he intends to give away the vast bulk of his wealth before he dies. The Gates Foundation, with assets of some $30 billion, already ranks as the world's biggest and handed out about $1.5 billion in grants in 2004, the most recent year for which figures were available.

“Just as Microsoft has taken off in ways I never expected, so has the work of the foundation,” Gates said.

The world “has had a tendency to focus a disproportionate amount of attention on me,” Gates said, adding that Microsoft has a deep and wide talent pool.

The Associated Press, Reuters and MSNBC.com's Martin Wolk contributed to this story.

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