Bill Gates steps back

Published 9:00 pm Thursday, June 15, 2006

REDMOND – Bill Gates plans to withdraw from day-to-day duties at Microsoft Corp., so he can focus on his charitable foundation while others run the company he co-founded and guided to industry dominance and vast personal wealth.

Gates, 50, said Thursday he will remain the company’s chairman after transferring his daily responsibilities over a two-year period.

The move will end an era at Microsoft, which Gates founded in 1975 with childhood pal Paul Allen and has been the public face of ever since.

The company on Thursday laid out a plan for other high-ranking executives to take on Gates’ duties. Gates and Chief Executive Steve Ballmer also noted that recent corporate reorganizations have been designed to move more responsibility to lower-ranking executives, so the company could more quickly make decisions without Gates and Ballmer.

In an interview, Ballmer conceded that there was no way to replace Gates.

“If we think anybody gets to be Bill Gates, I don’t think that’s a realistic hypothesis,” he said.

Gates stressed that, although he was giving up day-to-day responsibilities beginning in July 2008, he would still play a role at the company.

“I’m not leaving Microsoft,” he said.

Gates also said he had no plans to give up the distinction of being the company’s largest shareholder. “I’m proud of that,” he said.

Microsoft’s Chief Technical Officer Ray Ozzie will immediately assume Gate’s title as chief software architect and begin working with Gates on overseeing all software technical design.

Chief Technical Officer Craig Mundie will immediately take the new title of chief research and strategy officer and will work with Gates in those areas. Mundie also will work with general counsel Brad Smith to guide Microsoft’s intellectual property and technology policy efforts.

Gates’ decision comes at a difficult time for Microsoft. The company recently said it was delaying the new version of its Windows operating system yet again, and it is struggling to compete with Internet giants such as Google Inc. and Yahoo Inc. Investors also were caught off guard this spring when Microsoft announced plans to substantially increase overall research and development costs, and sent share prices tumbling.

But Gates said Microsoft is always facing new competitors and challenges and the recent spate didn’t affect his decision. “There isn’t any time in our history when there haven’t been questions about Microsoft,” he said.

Gates is ranked by Forbes magazine as the world’s richest man, with an estimated wealth of about $50 billion. That great wealth, he said, also brings great responsibility, and he repeated his often-spoken desire to give away the bulk of his fortune to charity.

Gates said he didn’t realize when he started the Bill &Melinda Gates Foundation in 2000 what potential there was for addressing some of the world’s greatest problems, such as global health and education. The foundation is now the world’s largest philanthropy, with assets totaling $29.1 billion.

“Just as Microsoft has taken off in ways I never expected, so has the work of the foundation,” he said.

Gates dropped out of Harvard to start Microsoft with Allen in 1975. He took Microsoft public in 1986 and was the company’s chairman and chief executive until 2000, when he assumed the role of chief software architect.

William Henry ‘Bill’ Gates III

Age: 50; born Oct. 28, 1955.

Education: Dropped out of Harvard University during his junior year.

Experience: Founded Microsoft Corp. with childhood friend, Paul Allen, 1975; served as chief executive until 2000, chief software architect 2000-06; remains chairman; founded the Bill and Melinda Gates Foundation, 2000.

Family: Wife, Melinda; three children.