OT is Microsoft getting nuts ?
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Microsoft Hires Former
Silicon Graphics Chairman to
Head Internet Unit
By STEVE LOHR
Microsoft has selected Richard Belluzzo,
a computer industry veteran, to head its
Internet operations, signaling that its future
lies more in electronic commerce than in
becoming a media company.
Belluzzo, 45, resigned on Monday as the
chairman and chief executive officer of
Silicon Graphics Inc., a position he held less
than two years. He joined the struggling
maker of computer work stations in January
1998, after a 22-year career at
Hewlett-Packard Co., where he rose to
become the No. 2 executive.
The Wall Street Journal reported Tuesday
that Belluzzo was expected to go to
Microsoft to head its Internet operations.
Microsoft declined to comment, and
Belluzzo could not be reached. But industry
executives close to Belluzzo said he does
plan to head Microsoft's Internet unit,
which is now called the Consumer and
Commerce Group.
Microsoft Corp.'s strategy for the World
Wide Web has been evolving toward
commerce for some time. The company,
once regarded as a potential media
powerhouse, has focused its recent Web
investments mainly on communications,
shopping, travel, scheduling and personal
finance. Its plan is essentially to transfer its
strength in the personal computer business
to the Internet arena -- developing popular
software that makes people more productive.
At the same time, Microsoft has pulled back
from some of its media ventures. Last
month, the company sold off its collection of
city arts and entertainment guides, MSN
Sidewalk, for about $240 million to
Ticketmaster Online-Citysearch.
In the Internet era, the distinction between
software and services are increasingly
blurring. Microsoft intends to funnel the
people who use its Internet software to
commerce sites in travel, banking and
shopping -- sites in which Microsoft has a
stake or that generate transaction revenues
for it.
"The strategy now is to use its software
strengths to create a transaction backbone
for the Internet," said Mark R. Anderson,
president of Technology Alliance Partners, a
research firm. "And Microsoft is really
pulling back from the media stuff."
Industry executives close to Belluzzo said
the timing of the Silicon Graphics
announcement on Monday caught Microsoft
somewhat by surprise when senior
executives, including Steven Ballmer, the
president, are on vacation. Belluzzo is
expected to begin work at Microsoft in
September.
Belluzzo made his industry reputation as the
executive largely responsible for building
Hewlett-Packard's computer printer
business into a consumer category. As a
young executive, Belluzzo pushed to lower
manufacturing costs for printers to make
them affordable and marketed them
aggressively through retailers.
For Hewlett-Packard, the printer business
now generates sales of more than $17 billion
a year. Before he left for Silicon Graphics,
Belluzzo also oversaw the strategy for the
reinvigorating Hewlett-Packard's personal
computer business, which has thrived in the
last couple of years.
"He understands consumers and he
understands consumer branding," said
Jeffrey Christian of Christian Timbers Inc.,
an executive recruiter who knows Belluzzo.
"And he's run large, complex technology
businesses before. Microsoft is going after a
solid technology executive, but he is not as
obvious a choice as someone coming
straight out of one of the Internet companies
like Yahoo or Amazon."
Microsoft has conducted a wide-ranging
search since last November when Pete
Higgins, a group vice president, stepped
down. to take a permanent leave of absence.
Microsoft has considered several candidates
including some from well-known Internet
companies. For example, George Bell, the
president of Excite At Home Corp., has said
he was approached about the Microsoft job,
but declined.
The Consumer and Commerce Group is
currently headed by a pair of executives,
Brad Chase and Jon DeVaan, who are
highly regarded at Microsoft. Chase is a
veteran marketer who led the campaigns for
Windows 95 and Internet Explorer. He is
now a key strategist in the company's
come-from-behind competition against
America Online. DeVaan is known as a
technology executive, who led the effort to
inject Internet software into Microsoft's
Office programs.
Both Chase and DeVaan are expected to
continue in their current assignments. But it
will fall to Belluzzo to run the business and
make sure that Microsoft is an increasing
force in the Internet. At Microsoft,
according to industry executives close to the
company, Belluzzo is viewed as a solid
leader who understands the industry and
who should learn the Internet business
quickly.
His sometimes difficult experience at Silicon
Graphics, which is still losing money and
recently shifted strategy once again, is
regarded by Microsoft more as a useful
learning experience than a black mark on
his career, according to executives close to
Microsoft.
Belluzzo's hardening experiences came
early. The son of Italian immigrants,
Belluzzo began working at age 11, doing
everything from sweeping floors to picking
prunes in the orchards near Santa Rosa,
Calif., where he grew up.
In an interview with Business Week
magazine, Belluzzo recalled that a big
motivation for improving himself came from
a high school guidance counselor told him
he was not college material. The humbling
encounter, Belluzzo said, prompted him to
lose 50 pounds and study hard. "That
motivated me to go to school, and do
something more than manual labor," he told
Business Week. |
