Microsoft Preps Insider Nadella for CEO Promotion

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Jan. 31 (Bloomberg) -- Bloomberg West Editor-At-Large Cory Johnson discusses reports that Microsoft will promote enterprise and cloud chief Satya Nadella to CEO on Bloomberg Television’s “Bloomberg Surveillance.”

First of all, our team did a great job breaking the story and there are caveats in the story saying it is not a done deal yet but for the board -- ok.

An inside job is the right way to look at this.

His is a guy who has credibility at microsoft, number one.

Microsoft is a place where it is famously hard to run divisions because the other divisions are gunning for you.

There are spirits -- stories at microsoft of divisions that develop their own software that deals -- because they were the want to deal because the political environment in the company was so difficult.

Was the active in steve ballmer's idea of one microsoft?

He certainly got him up within the recent reorganization.

To me, throughout this process, when i looked at the different candidates, i have seen the different visions of the future of microsoft.

In satya nadella -- alan mulally's name was bantered about, for instance, this was the guy to come in and solve the corporate albums of the divisions battling themselves.

In nadella, you have a guy who has really been focused on an surprise.

What microsoft is really struggling with is a post-pc world.

Their entire business has been developed on the back of windows.

Microsoft office, a dominant product, develop a cause of windows operating system monopoly is so powerful.

Now you have a world where the entire computing industry has gone away from the pc -- he is a cloud guy.

A cloud guy.

As a result -- and in a price guy.

Microsoft recognizing this is more likely in the future.

Is it more betting on enterprise and stuff like that versus no one else wanted the job?

It took them an long time to come to conclusion.

An list of ceo's he saying not interested.

A lot of people at microsoft want the job.

Let me posit an argument that one of the most important companies in all the world enterprise computing is not in the seattle area, but amazon.

Because amazon's web services is completely changing everything about technology and happening right on the back door of microsoft.

Let's rip up the script.

I was fascinated by amazon's earnings report last night.

Me, it was ac chains -- it was a sea change, jean muster called at that.

What was the dynamic?

I saw a lot of the same.

A company that has massive revenue growth and faster revenue growth they're not only the rest of consumer products but also faster revenue growth than anyone else on the internet.

And gross margins up.

Gross margins up, but barely.

Fourth-quarter gross margins for amazon should be fantastic there at the company does not aim to make money.

Want to go back to microsoft for a moment because this is something big and has been percolating.

Bill gates was on bloomberg television not too long ago and betty liu asked about the prospect of returning to microsoft here at this is what he said.

My full-time work will be the foundation for the rest of my wife.

My wife melinda and i enjoy that.

We get to do it in depth.

So i am not going to change that.

I will help out part-time.

He politely deflected.

But here's the thing, microsoft has only had to ceo's he in us history, bill gates and steve ballmer.

It is hard to think that gates will remove his presence completely.

Still on the board.

Two of the largest shareholders.

And i think most importantly, they deed -- did a reorg of the entire business -- obviously with his blessing.

Picking satya nadella means they will build on the decisions they already made, including the acquisition of nokia, including the dividend and share buyback things that have been going through, as well as the corporate focus.

I think the chances, for example, they spin off xbox, unlikely.

Thus promoting an insider like satya nadella reduce the likelihood of brain drain question mark there is a talent war out there.

Microsoft has not been exactly the most appealing place.

The thing with microsoft as people stay there.

People stay their life.

That is one of the big issues.

You make an entire 20-30 year career because you are the one who invented the "save" button.

People referred you in the hallways as that is the guy who did the "save" button.

Different from seattle -- other big companies.

We spoke to satya nadella just last month.

This is the new growth.

If you look at what happened even in the last quarter in terms of our clout, it grew over one hundred percent.

We have over 50% of the fortune 500 moving.

Already a run rate of a billion and a half.

That is the kind of new growth we are seeing as of the $2 trillion of i.t. spend is going through a fundamental shift.

New growth is a great point but what about the new style of microsoft question mark he was around when each operation ran its own company and they competed against each other.

I think a focus on enterprise will be interesting.

You mentioned to john thompson as well.

John is a friend of mine, but when he -- when he ran symantec.

I think that focus on enterprise, especially with john thompson, steps into the temporary chairman role, would be more emphasis as time goes on.

Cory johnson of course with "bloomberg west." let's want about the day.

Futures -10, markets quiet.

And then they change and all in all it is yield lower.

The 10-year is lower.

You just saw on bloomberg hd the stunning and we have seen in the last four months with these stunning low yield in europe dared so many people concerned about this inflation and out right deflation.

We will be looking at that through the morning as well.

Right now on this friday, let's get to company news.

You mentioned amazon.

Let's talk about google.

The retail -- a retailer spending more on google ads during the holiday.

Posted fourth-quarter sales that beat analyst estimates.

But profits were hurt by an 11% drop in the price of ads.

Following up on amazon, shares now down as much as 13% in extended trading.

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This text has been automatically generated. It may not be 100% accurate.

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