Microsoft’s Belluzzo Makes a Move

In a move considered not so surprising by industry watchers, Microsoft Corp.
President and Chief Operating Officer Richard Belluzzo
stepped down Thursday, triggering organizational changes for the Redmond, Wash. software giant.

Chief Executive Officer Steve Ballmer, whose more fiery management style insiders said led to clashes with Belluzzo, will pick up
some of Belluzzo’s duties, which include overseeing worldwide sales and marketing, human
resources, finance and licensing, and games and TV platform efforts. Ballmer won’t do it alone, as additional responsibilities will
fall to the heads of the Windows Client, Knowledge Worker, Server & Tools, Business Solutions, CE/Mobility, MSN and Home &
Entertainment departments.

As a sign that relations have not totally soured between Belluzzo and Microsoft, the outgoing executive will continue his duties
until May 1, and subsequently remain with the company until September to “ensure a smooth transition.”

Ballmer discussed the change in a public statement.

“Rick has worked closely with me analyzing the company’s structure to determine how we could improve our internal processes and
maximize opportunities for growth,” Ballmer said. “We realized we needed to give our core leaders deeper control and accountability
in the way they run their businesses, while at the same time ensuring strong communication and collaboration across the business
units. This is the right decision for Rick, but the company will certainly miss his leadership and experience.”

The way Microsoft tells it, Belluzzo “helped focus the company’s diverse consumer activities, incubate key initiatives such as Xbox
and .NET, and launch MSN on a much more successful course. He also drove a series of positive changes in Microsoft’s marketing
approach, built a number of strong internal processes, and helped move the company to the business model now being implemented.”

However, some analysts questioned some of the executive’s maneuvers, and said Belluzzo’s attempts to monetize MSN via
subscription-based services failed. Moreover, as the No. 3 guy behind Ballmer and Chairman and Chief Software Architect Bill Gates, sources said his responsibilties were being cut into.

For his part, Belluzzo said he will explore the possibility of starting his own company upon leaving Microsoft, a company he has
worked for since September 1999. Belluzzo began his career there as a vice president, but leap-frogged to his current positions in February 2001
after then-COO Bob Herbold retired.

“Given where Steve and I knew we needed to take the business, I decided it was the right time to pursue my goal of leading my own
company,” Belluzzo said. “I’m proud of what I’ve accomplished at Microsoft, and I will miss the great people I’ve worked with over
the past several years.”

Before heading to Redmond, Belluzzo served as chairman and CEO of Silicon Graphics Inc. for 19 months to help the company expand its
product line. His stint at SGI was preceded by one at Hewlett-Packard Co.
, where he was responsible for HP’s printer, personal
computer, and computer systems and services businesses.

Gates spoke favorably of Belluzzo in the press statement.

“Rick has made important contributions throughout his tenure here at Microsoft,” said Gates. “His leadership on improving internal
business systems and his role in the development of key product initiatives including .NET, MSN and Xbox were very significant

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