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Tech Giant Loses Touch

Microsoft CEO To Resign

FILE - In this Tuesday, May 22, 2012, file photo, Microsoft CEO Steve Ballmer delivers a speech during a Seoul Digital Forum in Seoul, South Korea.  Microsoft CEO Steve Ballmer can't afford to be wrong about Windows 8. If the dramatic overhaul of the Windows operating system flops, it will reinforce perceptions that Microsoft is falling behind other technology giants as the world moves on to smartphones, tablets and other sleek devices from Apple, Google and Amazon. If Ballmer is right, Windows 8 will show that the world's largest software maker still has the technological chops and marketing muscle to shape the future of computing.  (AP Photo/Lee Jin-man)

FILE - In this Tuesday, May 22, 2012, file photo, Microsoft CEO Steve Ballmer delivers a speech during a Seoul Digital Forum in Seoul, South Korea. Microsoft CEO Steve Ballmer can't afford to be wrong about Windows 8. If the dramatic overhaul of the Windows operating system flops, it will reinforce perceptions that Microsoft is falling behind other technology giants as the world moves on to smartphones, tablets and other sleek devices from Apple, Google and Amazon. If Ballmer is right, Windows 8 will show that the world's largest software maker still has the technological chops and marketing muscle to shape the future of computing. (AP Photo/Lee Jin-man)

New York — Microsoft Corp. Chief Executive Officer Steve Ballmer, who has struggled to adapt the world’s largest software maker to the shift away from personal computers and toward mobile devices, will retire after more than a decade at the helm.

Ballmer, 57, plans to step down within 12 months, Redmond, Wash.-based Microsoft said Friday in a statement. The company’s lead independent director, John Thompson, will oversee the search for his successor, heading a committee that will also include Microsoft co-founder Bill Gates.

Micrsoft’s stock shot up 7.3 percent on the news Friday, immediately jumping’s Ballmer’s net worth by $786 million, as stockholders interrupted his retirement as a good signal for the future of technology giant.

“Investors want new leadership to navigate the company in a world that doesn’t rely on the PC anymore,” said Jack Ablin, who helps oversee about $66 billion as chief investment officer of BMO Private Bank in Chicago, by phone. “In a big picture sense, he’s done a good job.”

The announcement comes six weeks after Ballmer streamlined the company’s management, spurring speculation that he was grooming successors. He cut the number of business units to four and said Windows chief Julie Larson-Green would oversee all hardware, including the Surface tablet and Xbox console and related games.

“There is never a perfect time for this type of transition, but now is the right time,” Ballmer wrote in a memo to employees Friday that was posted on Microsoft’s website. “We need a CEO who will be here longer term for this new direction.”

Ballmer took over the CEO role in 2000 from Gates, his schoolmate at Harvard. While Ballmer had a boisterous style that made him legendary at company presentations, he largely remained in Gates’s shadow. Ballmer wasn’t seen as possessing the same vision for technology or the ability to anticipate changes in the industry, said Richard Williams, an analyst with Cross Research in Millburn, N.J.

“Ballmer was more the executive than the visionary and he missed a few turning points that visionaries wouldn’t have,” Williams said.

Microsoft has lost almost half its stock value under Ballmer’s leadership. The company’s latest computing operating system, Windows 8, also hasn’t spurred the comeback that executives sought.

“He’s become a lightning rod for frustration over Microsoft’s lack of progress in mobile and Windows 8,” Williams said.