Microsoft President Belluzzo Resigns
By ALLISON LINN
AP BUSINESS WRITER
Wednesday, April 3, 2002
SEATTLE -- Rick Belluzzo, Microsoft Corp.'s president and chief operating officer, unexpectedly resigned Wednesday after a little more than a year in the position. The company said it has no plans to replace him.
At the same time, the software giant announced a restructuring that will give its main business units more autonomy.
Belluzzo, a longtime computer and software industry executive, joined Microsoft in September 1999 and held several senior positions before being promoted to his current position in February 2001.
Microsoft said in a statement Wednesday that Belluzzo would remain in his position until May, and would stay at the company until September to organize the transition. Belluzzo said in a statement he planned to start his own company.
Rob Enderle, an analyst with Giga Information Group, said the resignation was wholly unexpected - many assumed Belluzzo was being groomed to replace chief executive Steve Ballmer at some point.
"You don't normally put someone in that role in order to take him out of there a few days later or a few months later," Enderle said.
Analysts speculated that the move may have something to do with the restructuring also announced Wednesday. Under the new plan, the company's seven major business units will be given more responsibility for their fiscal and operational performance - duties traditionally given to a chief operating officer.
"That might have been part of the reason that he was motivated to leave," Enderle said.
Microsoft spokesman Corey duBrowa said the restructuring was designed to make Microsoft "a more nimble company," which the company believes is essential to future growth.
Enderle said the company is likely hoping to make its units more fiscally responsible at a time when all technology companies - including Microsoft - are struggling to make profit targets.
"They're having some difficult budgetary problems," Enderle said. "Revenue's off and clearly they're going to have to do some cost-cutting."
Before being appointed president, Belluzzo focused much of his attention on the company's consumer operations, including its Xbox game system, its MSN Messenger instant messaging system and its Ultimate TV service. Belluzzo also was instrumental early on in the company's .NET initiative for delivering a variety of services over the Internet.
All of these consumer-oriented projects have been the hallmark of Microsoft's efforts to become more of a consumer-products company, although most of them have yet to make money for the company.
Before joining Microsoft, he was briefly chief executive of Silicon Graphics Inc., and previously spent 23 years at Hewlett-Packard Co.
Belluzzo replaced Bob Herbold, a longtime Microsoft executive who continues to work part time for Microsoft in its dealings with industry and political leaders.
In trading Wednesday on the Nasdaq Stock Market, shares of Microsoft closed at $56.33, down 97 cents, but were up 17 cents in after-hours trading. Belluzzo's departure was announced after markets closed.
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