NEW YORK Jan 8 Speculation over Microsoft
Corp's succession plans refocused on internal choices
on Wednesday, a day after the leading outside candidate, Ford
Motor Co CEO Alan Mulally, took himself off the list of
potential CEOs at the world's largest software maker.
For months, Microsoft watchers had pegged Mulally as the
odds-on bet to succeed Steve 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
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.
Sources familiar with the process have told Reuters that
Microsoft is down to a "handful" of candidates, including
insiders Satya Nadella and Tony Bates. 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
As a former Microsoft executive who will soon rejoin the
company when the takeover is complete, Elop was fingered in 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."
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 insider status."
Microsoft shares, which have gained 36 percent over the past
year, were down 1.2 percent, while Ford shares gained about the
'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
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
Thompson, who leads the four-member CEO search committee
that includes Microsoft co-founder and chairman Bill Gates, said
at the time he expected the panel to reach a decision "in the
early part of 2014."