A source close to the company said no appointment was likely until
the last week of January or in February. The source asked not be
identified because they were not authorized to speak publicly about
the process to select a successor to long-time CEO Steve Ballmer,
who in August announced his plan to retire.
In late January, many Microsoft executives will be focused on the
company's earnings, which are scheduled to be released on January
23. Also, chairman Bill Gates, a key member of the search committee,
will be at the World Economic Forum in Davos.
For months, Microsoft watchers had pegged Mulally as the odds-on bet
to succeed Ballmer as chief executive at the dominant producer of
software for desktops and laptops, which has faltered in making the
transition to the fast-growing mobile phone and tablet markets.
But Mulally formally pulled out of the running on Tuesday, telling
the Associated Press he would remain at Ford through 2014.
It was unclear whether Mulally's withdrawal from consideration was
his decision or Microsoft's. While the company's intentions remained
a guessing game, internal candidates now seemed the obvious ones,
especially in light of comments by Microsoft about the importance of
tech know-how for the top job.
Mulally appeared to be the front runner in the latter part of last
year and seemed to be interested in the job, but Microsoft never
made him an offer, suggesting that the prevailing mood on the
company's board was that he was not right for the job, two sources
familiar with the process said.
The sources have also told Reuters that Microsoft is down to a
"handful" of candidates, including insiders Satya Nadella, executive
vice president of the Cloud & Enterprise group and Tony Bates,
executive vice president of Business Development and Evangelism.
Former Nokia CEO Stephen Elop, a Microsoft veteran before moving to
Nokia, whose mobile phone business Microsoft bought last year, has
also been cited as a top candidate, as have one or more outsiders
from the tech industry.
As a former Microsoft executive who will soon rejoin the company
when the takeover is complete, Elop was mentioned as now "front and
center" of the CEO race in a research note from FBR analyst Daniel
Ives, who cited his "previous Microsoft experience and demonstrable
expertise in the mobile space."
[to top of second column]
Evercore analyst Kirk Materne saw it differently, naming Nadella and
Bates as the leading internal candidates who "could potentially
institute organizational change at a more rapid pace given their
Microsoft shares, which have gained 36 percent over the past year,
were down 1.2 percent, while Ford shares gained about the same
"DARK HORSE" IN THE RUNNING?
Nomura's Rick Sherlund labeled Mulally's withdrawal as
"disappointing" in a research note, echoing the sentiment of some
other investors and analysts.
Sherlund said it was unclear who the board would turn to, saying he
viewed Bates and Nadella as capable, but "more likely to take
direction from Microsoft's board rather than redirect the board and
take the company in a different direction as we prefer."
If the company does opt to go with an outsider, candidates could
include Facebook Inc Chief Operator Officer Sheryl Sandberg, VMware
Inc CEO Pat Gelsinger and Pivotal CEO Paul Maritz, Ives said.
Sherlund agreed that Microsoft could still look at a "dark horse"
outsider but noted that some tech sector candidates, including
Maritz, may have already declined to take the job.
In a blog post on the company's website in December, Microsoft lead
independent director John Thompson emphasized the need for a CEO
with good tech bona fides and "an ability to lead a highly technical
organization and work with top technical talent."
Thompson, who leads the four-member CEO search committee, said at
the time he expected the panel to reach a decision "in the early
part of 2014."
(Additional reporting by Nadia Damouni;
editing by David Gregorio and Grant McCool)
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