USA Today
SAN FRANCISCO — Microsoft named Rick Belluzzo president and chief operating officer yesterday, just 17 months after he joined the world’s largest software company.
Belluzzo, 47, replaces chief operating officer Bob Herbold, 58, who is retiring.
Belluzzo joined Microsoft to spearhead Internet operations. He has impressed company brass with his big-picture management style and affinity for consumer services.
Belluzzo, former CEO of Silicon Graphics and a Hewlett-Packard executive, will need to call on his 20-plus years of experience as Microsoft limps through a midlife crisis of sorts, observers say.
The Department of Justice last month launched yet another probe into Microsoft’s ways with its $135 million investment in Corel — and the prospect still looms that an earlier antitrust probe could break it in half. A series of executive defections has depleted its upper ranks. Its revenue growth rate is slowing.
And the PC-software pioneer is trying to find its place in an increasingly Internet-centric industry. Its transition to fee-based Internet software and services through dot-Net, a $1 billion initiative announced in June, is not expected to come to fruition for years.
"The company’s glory days are over," says Paul Saffo, a director of the Institute for the Future in Palo Alto, Calif. "The center of gravity is moving away from desktop PCs and toward information appliances. Microsoft has its work cut out."
Day-to-day management will be left to Belluzzo. He is credited with upgrading the Microsoft Network online service, developing the Xbox video-game console and establishing the dot-Net division.
"We’re working to establish the dot-Net vision, round out consumer services and pump up corporate sales," Belluzzo said in a phone interview yesterday. "It’s about getting closer to customers. We don’t believe the PC is dead. Its growth isn’t where we want it, but it will improve as we introduce exciting new products that extend the personal computer."
Belluzzo’s appointment is Microsoft’s second major executive shuffle in 13 months. Steve Ballmer, 44, succeeded Bill Gates as CEO in January 2000.
Ballmer, a former salesman, is expected to spend more time on strategy and on selling Microsoft to software developers and customers. "That’s what Steve does best," says Dwight Davis of Summit Strategies.
Microsoft shares inched up 19 cents to $58.38 yesterday.
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