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Ballmer spoke to the London School of Economics in 2010. He became the symbol of Microsoft fans’ frustrations.

Microsoft CEO to retire

To leave within 12 months; firm’s woes cited

Bloomberg News photos
Although enthusiastic, Ballmer struggled as the high-tech world moved away from personal computers running Windows.

– 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.

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. Windows Phone software head Terry Myerson gained responsibility for the Windows and Xbox operating systems.

“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 University. While Ballmer had a boisterous style that made him legendary at company presentations, he largely remained in Gates’ 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.

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.

In his memo, Ballmer called this “a time of important transformation for Microsoft.”

“This is an emotional and difficult thing for me to do,” he wrote. “I take this step in the best interests of the company I love.”

He said he plans to continue as one of the company’s largest owners.

Last month’s reorganization, Microsoft’s largest shakeup in a decade, is designed to speed development of hardware and services as the company’s Windows business suffers from the shrinking PC market and poor demand for Windows-based mobile devices.

The shuffle reversed some changes Ballmer made in 2002, when he divided Microsoft into what was then seven individual product units, each led by an executive with operational and financial responsibilities. In the decade since then, he mainly tinkered with individual businesses.