Microsoft CEO Steve Ballmer to retire within the next year

Microsoft CEO Steve Ballmer plans to retire from his position within the next 12 months, he said today in a company-wide email that Microsoft released to the press.

"There is never a perfect time for this type of transition, but now is the right time," said Ballmer. "My original thoughts on timing would have had my retirement happen in the middle of our transformation to a devices and services company focused on empowering customers in the activities they value most. We need a CEO who will be here longer term for this new direction."

Ballmer will stay on as CEO until the company appoints a successor. Microsoft's board of directors has put together a committee to lead the search that includes chairman Bill Gates and will be headed by John Thompson, lead independent director of the board. The committee is working with Heidrick & Struggles International, an executive recruiting firm, and will consider internal and external candidates.

"We are focused on selecting a new CEO to work with the company’s senior leadership team to chart the company's course and execute on it in a highly competitive industry," said Thompson in a press release. Gates expressed appreciation for Ballmer's decision to remain with Microsoft for now, saying, "We're fortunate to have Steve in his role until the new CEO assumes these duties."

"This is an emotional and difficult thing for me to do"

Ballmer joined Microsoft in 1980 as its 30th employee. He has served as CEO since January 2000, a period during which the company diversified from a PC-focused organization into one built around devices (such as the Xbox platform and Surface tablet) and services (such as Office 365, the subscription-based productivity suite). Under his tenure, Microsoft's annual revenue has grown from $25 billion to more than $70 billion. Since Ballmer became CEO, Microsoft has launched six major versions of its flagship product, Windows: 2000, ME, XP, Vista, 7 and 8. The company's mobile operating system, Windows Phone (formerly Windows Mobile), has been much less successful.

Last month, Ballmer announced a major realignment of Microsoft around devices and services, a strategy called "One Microsoft." Ten days before the reorganization announcement, Don Mattrick, the head of Microsoft's Xbox division, left the company to become CEO of Zynga.

"I am excited by our mission of empowering the world and believe in our future success. I cherish my Microsoft ownership, and look forward to continuing as one of Microsoft’s largest owners," Ballmer added. "This is an emotional and difficult thing for me to do. I take this step in the best interests of the company I love; it is the thing outside of my family and closest friends that matters to me most."

You can read Ballmer's full email to Microsoft employees here.