Microsoft Said to Include Turner on Internal List for CEO

Nov. 7 (Bloomberg) -- Bloomberg Contributing Editor Paul Kedrosky looks at what Microsoft needs in its next CEO and whether they’re better looking to the outside or promoting from within. He speaks on Bloomberg Television’s “Bloomberg Surveillance.”

Microsoft Corp.’s board placed Chief Operating Officer Kevin Turner on a three-person list of internal candidates to replace departing Chief Executive Officer Steve Ballmer, said a person with knowledge of the process.

The other two internal candidates are business development and evangelism chief Tony Bates and Satya Nadella, who oversees the company’s cloud and enterprise business, said people familiar with the matter, who asked not to be identified because the search is confidential. Microsoft’s board also spoke with other senior leaders, including Qi Lu, who oversees Bing and Office, and operating systems chief Terry Myerson, before narrowing the internal list, said two people.

The board continues to refine its broader list of candidates and there isn’t a final shortlist, said people with knowledge of the process. External candidates such as Ford Motor Co. CEO Alan Mulally and former Nokia Oyj CEO Stephen Elop are still interviewing with the board’s search committee, said the people.

Some external CEO candidates have said they’re not interested in being considered for the position. Those include Paul Maritz, who heads up EMC Corp.’s Pivotal venture, according to people familiar with Maritz’s thinking. Oracle Corp. co-President Mark Hurd has also said he’s not interested and plans to stay at the Redwood City, California-based company, said a person with knowledge of his thinking. EBay Inc. CEO John Donahoe had earlier declined to be considered, two people have said.

Photographer: Kevin P. Casey/Bloomberg

Microsoft Corp. Chief Operating Officer Kevin Turner poses for a portrait at the company's headquarters in Redmond, Washington, in this Sept. 2008 file photo. Close

Microsoft Corp. Chief Operating Officer Kevin Turner poses for a portrait at the... Read More

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Photographer: Kevin P. Casey/Bloomberg

Microsoft Corp. Chief Operating Officer Kevin Turner poses for a portrait at the company's headquarters in Redmond, Washington, in this Sept. 2008 file photo.

Strategy Shift

Microsoft’s board is working to replace Ballmer, who has been CEO for 13 years and announced in August that he plans to retire within 12 months. The Redmond, Washington-based company is shifting its strategy to focus more on hardware and services after years of being a dominant software player. Microsoft is also acquiring Nokia’s handset unit to better compete with Apple Inc. and Google Inc. in mobile software and devices.

“Microsoft needs a very strong, transformative leader and while I usually prefer insiders, at this moment they very likely need to go outside,” said Bill George, a director at Goldman Sachs Group Inc. and Exxon Mobil Corp. and a Harvard Business School professor. “An insider may not be able to make the difficult big changes Microsoft needs and get other insiders to follow him.”

Turner, who also oversees Microsoft’s sales force, joined the company in 2005 from Wal-Mart Stores Inc. He was CEO of Sam’s Club, among other jobs, in an 18-year career at the retailer.

Photographer: David Paul Morris/Bloomberg

Satya Nadella has overseen Microsoft Corp.'s cloud and enterprise business. Close

Satya Nadella has overseen Microsoft Corp.'s cloud and enterprise business.

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Photographer: David Paul Morris/Bloomberg

Satya Nadella has overseen Microsoft Corp.'s cloud and enterprise business.

‘No Change’

Microsoft rose 4.2 percent to $38.18 at the close in New York yesterday, the highest since July 2000.

Peter Wootton, a spokesman for Microsoft, declined to comment or to make any of the internal candidates available. David Oro, a spokesman for Pivotal, declined to comment, as did Susan Sheehan, a spokeswoman for Elop, and Deborah Hellinger, a spokeswoman for Oracle.

“There is no change from what we announced last November,” Jay Cooney, a spokesman for Ford, said in an e-mail, referring to the company’s plan for Mulally to remain CEO through at least 2014. “Alan remains fully focused on continuing to make progress on our One Ford plan. We do not engage in speculation.”

To contact the reporters on this story: Dina Bass in Seattle at dbass2@bloomberg.net; Peter Burrows in San Francisco at pburrows@bloomberg.net; Aaron Ricadela in San Francisco at aricadela@bloomberg.net

To contact the editor responsible for this story: Pui-Wing Tam at ptam13@bloomberg.net

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