Mollenkopf Out as Microsoft CEO, Mulally Causing Waves at Ford
Microsoft's search for its next CEO is coming down to the wire.
As the Redmond, Wash.-based software company's self-imposed deadline approaches—Microsoft is reportedly seeking to name Steve Ballmer's replacement before year's end—its choices are dwindling. According to Bloomberg's Ian King and Scott Morit, Qualcomm's chief operating officer, Steve Mollenkopf, is no longer a contender.
"Qualcomm Inc., the world's largest maker of chips for mobile phones, promoted Steve Mollenkopf to chief executive officer, elevating an official who was said to be a candidate for the top job at Microsoft Corp," said the report. The appointment, which takes effect on March 4, 2014, is a departure from tradition.
Microsoft's "board had been considering the Qualcomm executive as a candidate, people familiar with the matter said this week," revealed the report.
Mollenkopf's promotion marks the first time that Qualcomm has appointed someone outside of the founding family. The current CEO, Paul Jacobs, will be named executive chairman after the transition. Analyst Roger Entner, of Dedham, Mass.-based Recon Analytics, told Bloomberg, "This is the first time a Jacobs won't be CEO at Qualcomm—that says a lot about Mollenkopf's merits."
Those merits include transforming "Qualcomm from simply a wireless chip supplier to a leading developer of processors for mobile devices"—a skill set that could potentially benefit Microsoft.
Amid plunging PC sales and explosive tablet and smartphone adoption, Microsoft has turned its attention to tablets and smartphones. On Sept. 2, the company announced that it was acquiring Nokia's hardware business for $7.1 billion. The company's first stab at tablets, the Surface RT, failed to live up to expectations. Microsoft reported a $900 million write-off in July due to poor sales of the Surface RT.
Meanwhile, another top candidate, Ford CEO Alan Mulally, is raising eyebrows in Dearborn, Mich.
Challenging the old axiom that bad news is better than no news, Ford's leadership is said to be growing impatient with Mulally's refusal to definitively address his candidacy for the top spot at Microsoft. His cageyness "threatens to overshadow car introductions at Ford Motor Co. and raises the risk of internal strife among his deputies at the automaker," reported Businessweek on Dec. 16. Edsel Ford II, board director at Ford and great-grandson of the company's founder, expects Mulally to stay with the car company through 2014, disqualifying him for the CEO post at Microsoft.
Considered a frontrunner, Mulally has been criticized for taking the spotlight from his company's initiatives, including the debut of the 2015 model of Ford's iconic Mustang.
Ford is set to introduce 23 new cars next year and expand its workforce by 5,000, efforts that are being overshadowed by Mulally's noncommittal statements. Edmunds.com analyst Michelle Krebs described the situation as "a distraction at a time when they need to focus on plants, products and people—not one person" in the Businessweek report. "They are launching more products next year than any time in the history of Ford Motor Co. They need to focus on the business."