Ballmer Announces Retirement, Microsoft Shares Go Up

Microsoft Corporation's CEO Steve Ballmer announced his retirement in a year on Friday, shocking some and cheering up others. The lighting-rod CEO leaves behind a legacy of successful innovations and failed strategies for the company founded by Bill Gates in 1975.

Ballmer's surprise retirement announcement was released to the public in a press statement on Friday, Aug. 23, 2013. "There is never a perfect time for this type of transition, but now is the right time," said Ballmer. "We have embarked on a new strategy with a new organization and we have an amazing Senior Leadership Team."

Ballmer said he would continue as CEO of Microsoft and retire within the next 12 months, after a successor has been chosen. "As a member of the succession planning committee, I'll work closely with the other members of the board to identify a great new CEO," said Bill Gates. "We're fortunate to have Steve in his role until the new CEO assumes these duties."

Ballmer is leaving at a time when Microsoft, at his direction, has undergone a transformation from a primarily software-related company to a device maker and service provider. Some innovations - both successful and not - that happened under Ballmer's watch include the creation of the touchscreen-centered Windows 8 operating system, the laptop/tablet hybrid Microsoft Surface line of devices, the Windows Phone mobile operating system and the Microsoft Office 365 subscription-style Office suite.

But many of those goods and services have not taken off in the market the way Microsoft, and Ballmer, surely hoped they would. While some Ballmer-directed projects are still popular- like Microsoft's Xbox line and online service Xbox Live - too many initiatives, according to some analysts, led to a sprawling tech company without a core. Microsoft's products and services "are downright confusing" to customers, said Daniel Gasparro, an IT consultant familiar with the company, to the Wall Street Journal. "When you're spread too thin, you're not good at anything."

Microsoft shares lifted on Friday, hitting 7 percent after the news broke. But the company is continuing to head in the direction of devices and services, according to the release announcing Ballmer's eventual retirement. "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," said Ballmer. "We need a CEO who will be here longer term for this new direction."

The committee to direct the process of finding a successor for Ballmer has been appointed, with Bill Gates acting as Chairman of the Board. The committee is considering both external and inside hiring for the position.

Steve Ballmer has had a long history with Microsoft and its founder. He met Gates as a student in Harvard University earning a bachelor's degree in mathematics and economics. He worked for two years outside of school before joining Microsoft in 1980 - only five years into the company's life. According to the Wall Street Journal, during Ballmer's time at the company, Microsoft has grown from a $7.5 million company employing 30 people to almost $78 billion in annual revenue and a workforce of nearly 100,000. As of March, Steve Ballmer's net worth was $15.2 billion.