Gates's Future Fuels Speculation as Microsoft Seeks New Chief

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SEATTLE -- There's a question being whispered around Microsoft's sprawling suburban campus: What will Bill Gates do?

Mr. Gates's role at Microsoft has been a source of wide fascination since he stepped away from his longtime job as chief executive in 2008. But interest in it has grown in the past few years as Microsoft has stumbled, and it intensified sharply in the weeks since Steven A. Ballmer announced he would be retiring as Microsoft's chief executive in the next year.

Many employees and investors fondly remember the company's heyday under Mr. Gates, a towering figure in the tech industry who built Microsoft into a dominant force. And some Microsoft employees say they have noticed Mr. Gates around the company's campus in Redmond, Wash., more often since Mr. Ballmer's announcement, leading to speculation -- perhaps mixed with a dash of hope -- that he might want to assume a bigger role and return the company to its past heights.

"It's impossible to walk away from something that you have shaped and led to that extent, and with which you are so personally identified," Ed Lazowska, a professor of computer science at the University of Washington, said of Mr. Gates. "I think there's zero chance that he disengages -- if anything, I bet he engages more."

Whatever his future duties, Mr. Gates already has a strong hand in deciding the company's direction. He remains Microsoft's chairman and its largest individual shareholder, and he is one of four members of the committee leading the search for the next chief executive. His opinion in the selection process will hold more sway than anyone else's.

Despite the speculation, it remains a long shot that Mr. Gates will take on bigger day-to-day duties at the company. According to several people close to him, who spoke on the condition that they not be named because their discussions were private, Mr. Gates has no intention of leaving his philanthropic career to work again full time at Microsoft. Jon Pinette, a spokesman for Mr. Gates, declined to comment.

Still, the narrative of the rescuing founder remains a powerful one, especially since Steven P. Jobs, a rival of Mr. Gates's, returned to Apple and transformed it into one of the world's most profitable companies. Microsoft has struggled in important new markets in recent years, particularly with mobile phones and tablets, leading some executives in the tech industry to call for Mr. Gates to return as chief executive.

The search for Mr. Ballmer's replacement is still in its early stages. Although the process could suddenly accelerate, the board is in no hurry to act before the end of the year, said a person briefed on the succession plans.

According to this and another person with knowledge of the Microsoft's chief executive search, the list of executives being considered for the job includes Alan Mulally, the chief executive of Ford; Paul Maritz, a former Microsoft executive who now leads a cloud technology company called Pivotal; Tony Bates, a current Microsoft executive who came to the company through its acquisition of Skype; and Stephen Elop, the Nokia executive who has already announced his intention to return to Microsoft once the company completes its acquisition of Nokia's phone business.

Frank Shaw, a Microsoft spokesman, declined to comment on potential candidates for chief executive.

Among outsiders, Mr. Mulally of Ford is a favorite because of his success in reviving Ford without the help of the government bailout and bankruptcy filing used by the other two Detroit automakers, General Motors and Chrysler.

Mr. Mulally was unavailable for comment about whether he has interest in the Microsoft job. He does not have a software background, which has given some current and former Microsoft employees pause because they believe the company needs a leader with a strong technology vision. Another concern is Mr. Mulally's age, 68, which suggests he may not be in the job for long.

Mr. Mulally has consistently said he will stay as chief executive at Ford at least through 2014. Ford's board is set to meet on Wednesday, and its directors may be under pressure to address the speculation before it becomes a distraction.

"There is no change to what we announced last November," said Jay Cooney, a Ford spokesman. "Alan is absolutely focused on continuing to make progress on the One Ford plan."

No talk about Microsoft's future gets very far before Mr. Gates's name is mentioned. Long the face of the company and one of the world's richest people, Mr. Gates turned his attention to philanthropy in 2008, focusing much of his efforts on education and global health challenges like the fight against H.I.V.

He has significantly reduced his holdings in the company in recent years, putting much of the money toward his philanthropy. But he still owns 4.52 percent of Microsoft's stock, worth about $12.8 billion, more than any other individual shareholder. A decade ago, he held 10.75 percent.

Along the way, he has remained engaged in discussions about products at Microsoft, meeting frequently with executives from the company. Typically, he takes product briefings from Microsoft executives at his personal offices in Kirkland, a Seattle suburb a short drive from Microsoft's headquarters in Redmond, people with knowledge of the meetings said. These meetings can happen once a week or less, depending on his travel schedule for his philanthropic duties and the flow of Microsoft product development.

At the product meetings, he has met with managers of the Windows, Bing search and Office products. He is considered a "fresh set of eyes" whose input is valued by Microsoft executives, one person familiar with the meetings said.

For reasons that are unclear, Mr. Gates showed up for a handful of product briefings on the company's campus in the weeks after Mr. Ballmer's resignation was announced. Mr. Shaw of Microsoft said the amount of time Mr. Gates was spending with Microsoft employees had not changed meaningfully.

"Bill's overall engagement with Microsoft product and engineering teams has remained consistent since he transitioned to his current role," Mr. Shaw said.

There is a faction of Microsoft investors and former employees that thinks the company needs less, not more, of Mr. Gates. As chairman, these people believe, Mr. Gates deserves equal blame for Microsoft's travails in recent years.

Last week, news reports surfaced that three unnamed shareholders had begun pressing the Microsoft board for Mr. Gates to leave as chairman because they believed he would be an impediment to strategy changes by the new chief executive.

Any such push is very unlikely to succeed in forcing Mr. Gates to distance himself from the company, according to several people who know Mr. Gates and the dynamics of the board. Last Thursday, the Microsoft board recommended Mr. Gates' re-election as a director, according to a company filing with securities regulators.

Mr. Gates's future role will partly be up to the new chief executive. Jeffrey A. Sonnenfeld, senior associate dean at the Yale School of Management, said it would be important for Microsoft's new leader to keep Mr. Gates around.

"I think it's hugely positive," he said about Mr. Gates's presence at the company. "You can have a wise elder statesperson who is very inspirational if they know the boundaries."

Among many aspiring techies, he still remains an inspirational, Walt Disney-like figure seen as a founding father of the industry.

"When I was growing up, Bill Gates was my hero," Mark Zuckerberg, the chief executive of Facebook, said in a speech at a conference last month. He added: "I think he's one of the greatest visionaries that our industry has ever had."

Bill Vlasic contributed reporting from Detroit.

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This article originally appeared in The New York Times. First Published October 7, 2013 2:00 PM


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