Bill Gates surrendering Microsoft helm

A Harvard University dropout who ushered in the home computer age and made billions of dollars along the way will have his last official day of work at Microsoft on June 27.

Three people will essentially fill the void left behind when Bill Gates retires from the company he and friend Paul Allen co-founded in 1975.

Since Gate's began his transition from leading Microsoft to heading his personally-bankrolled charity, The Bill and Melinda Gates Foundation, his job as chief software architect has been handled by Ray Ozzie.

Craig Mundie inherited Gate's chief research and strategy officer duties, while former Harvard classmate Steve Ballmer became chief executive officer at the Seattle-based software colossus.

Gates left Harvard after two years to found the firm that became global powerhouse Microsoft. He later received honorary degrees from Harvard and other universities.

After retiring, Gates will remain chairman of the Microsoft board of directors and its largest shareholder.

"I don't think anything is going to drastically change the day he leaves," said Matt Rosoff of the private analyst firm Directions On Microsoft.

"If he thinks something is important and tells Steve Ballmer, Ballmer will listen to him."

Still, Gates's bespectacled nerdish visage is an integral part of Microsoft's image and his departure is symbolic, according to analysts.

"The challenge Microsoft has when the founder departs is remembering its heart," said analyst Rob Enderle of the Enderle Group in Silicon Valley.

"At some point the firm has to take the essence of what made Bill Gates successful and make sure that is preserved. Whether it is a company or a person, once you've lost your heart there isn't much left but a shell."

Analysts say there are signs that Microsoft has been struggling since Gates stepped away from managing operations several years ago.

Microsoft has "missed a number of opportunities" and the Windows and Office software on which its fortune is built have stumbled.

Microsoft's Windows Vista operating system released in January of 2007 has flopped with customers, many of whom are clinging to its predecessor Windows XP.

"They are in trouble on the desktop (computer software)," Enderle said. "Microsoft started as a desktop vendor and suddenly it is its weakness."

Meanwhile, Apple's Macintosh computers have been gaining popularity.

While Windows is still used on 90 percent of the world's computers, Macintosh computers using Apple operating systems has grown to more than five percent of the market.

The software giant also sees its bottom line threatened by Google, which offers free online programs that compete with Office and other packaged software sold by Microsoft.

Microsoft failed in a recent bid to buy Yahoo for nearly 50 billion dollars in order to combine online resources to better battle Google in the Internet search and advertising market.

Enderle said he doesn't see "Gates's fingers" in the attempted Yahoo takeover, and Gates was likely among board members that backed pulling the plug on acquisition talks.

"Microsoft has to leverage its strengths; right now it is thrashing a bit," Enderle said. "The company is on its own. The training wheels are off. It needs a way to point itself in the right direction and peddle like hell."

Microsoft's server and tools division is its most profitable unit. It's entertainment unit, which sells Xbox videogame consoles and gaming software, has yet to make a profit.

"You could see Microsoft struggling after Bill Gates stepped out of day-to-day roles," Enderle said.

"A founder takes such a larger-than-life role and directs a company in very subtle ways that are often forgotten when a founder leaves. That gap, for a lot of companies, has been almost terminal."

Facts about software giant Microsoft

The US-based company Microsoft has become one of the world's top companies and the uncontested global leader in software due to its two star products: the Windows operating system and Microsoft Office. Microsoft has long been considered a champion of innovation since it was founded in 1975 by Bill Gates, who is departing the company on June 27 and leaving the reins to top executive Steve Ballmer.

The company's task now is to tackle the online advertising market, where it faces steep competition from Internet giant Google which has mounted a massive challenge to Microsoft's dominance by launching a series of free Internet software products last year.

BASICS

Microsoft was created on April 4, 1975 by Bill Gates and Paul Allen. Its headquarters are located in Redmond, Washington in the northwestern United States. The company has locations in 104 countries and employs 80,000 people, 60 percent of whom work in the United States.

SECTORS

Microsoft's Windows runs on more than 90 percent of the world's personal computers, which means it is used on nearly a billion machines worldwide. Microsoft Office, which includes applications such as Word and Excel, also has captured around 90 percent of the office software market.

Microsoft has regularly faced antitrust accusations, and was forced to pay a record fine of 497 million euros by the European Commission, which imposed the fine in March 2004 and saw it upheld in September 2007.

Other products Microsoft has developed include portals and search engines on MSN Internet, in television with the MSNBC news channel and website, the online edition of the encyclopedia Encarta, and in products such as the Microsoft mouse, the personal music player Zune and the XBox game console, one of the higest selling in the world.

STOCK

With shares being traded since March 13, 1986, Microsoft has the third highest stock market capitalization in the United States with 270 billion dollars, far ahead of its rivals Google, IBM and Apple.

Microsoft posted 51.12 billion dollars in sales for the fiscal year 2006-2007, and net profits of 14.07 billion dollars, and aims to sell 60 billion dollars worth of goods in the present cycle.

© 2008 AFP

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