TECH
08/23/2013 09:17 am ET Updated Oct 23, 2013

Steve Ballmer To Retire In A Year, Microsoft Announces

Steve Ballmer, CEO of the world's largest software maker for 13 years, will retire within 12 months, the company announced on Friday.

In a press release, Microsoft said Ballmer will helm the company as its board of directors searches for his successor.

“There is never a perfect time for this type of transition, but now is the right time," Ballmer was quoted as saying in the release.

Ballmer, a close college friend of founder Bill Gates, was named chief executive officer in 2000 after Gates stepped down to focus on philanthropy. At the time, Microsoft dominated the market for computer operating systems.

But over the intervening decade, the firm has seen its stranglehold on the computer business slip as it has failed to keep pace with the likes Apple and Google as consumers increasingly use smartphones and tablets to meet their computer needs. Products like mp3 player Zune in 2006, Microsoft's answer to the iPod, and Windows Phone in 2010, the mobile operating system meant to replace that of the iPhone, failed to win over a significant number of customers.

Just last month, Ballmer announced a massive reorganization of Microsoft's top brass to get the company "rallying behind a single strategy." A goodbye letter inked by Ballmer on Friday makes it unclear if he was forced out or left on his own volition. Ballmer wrote:

My original thoughts on timing would have had my retirement happen in the middle of our transformation to a devices and services company focused on empowering customers in the activities they value most. We need a CEO who will be here longer term for this new direction.

Microsoft went out of its comfort zone in its latest round of innovation, releasing a new touchscreen-based Windows 8 operating system and its own hardware, a tablet called Surface, both in 2012. But those efforts were not rousing successes: Sales for Windows 8 licenses were lukewarm and Microsoft needed to write off nearly $1 billion on unsold Surface inventory. However, Microsoft met of its expressed goal of making Windows Phone 8 the third largest smartphone operating system.

Hired in 1980, only five years after Microsoft's founding, Ballmer was the company's 30th employee. Throughout his career, Gates relied heavily on right-hand men -- originally co-founder Paul Allen, then Ballmer -- for advice in building what would become the world largest technology company.

The man many believed to be the natural successor to Ballmer, former Windows chief Steven Sinofsky, was unexpectedly fired by Ballmer last year.

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