Cognoscenti anoint Nadella as next Microsoft CEO

Months-long search may end where it started -- inside the company -- if cloud group's veteran leader gets Ballmer's chair

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Nadella also has his age going for him. At 46, he is just three years older than was Ballmer when he first sat in the CEO's chair in January 2000. Others often rumored to be in the race -- Bates, who is 46, Turner (48 or 49) and Elop (50) -- are in that same age range. Age came up during talk of Mulally taking the reins, with some wondering whether the 68-year-old was up to the challenge of running the broad, often bewildering, portfolio that makes up Microsoft.

Analysts and others have closely followed the leaks and anonymously-sourced news stories about the CEO selection because Microsoft is at a crossroads, trying to catch up in mobile even as traditional PCs -- the ultimate source of much of its revenue -- have fallen out of favor with consumers and its bet on Windows 8 has not paid off. In 2012, Ballmer announced a strategic change-up, one that aspired to make the company a seller of devices and services rather than one that relied on its decades-long expertise in software.

From its most recent earnings statements, Microsoft has made little progress in that turn, as its highest-margin groups are those that sell software, and subsidize the less profitable device-based group.

In 2013, Ballmer reorganized the company and announced the $7.4 billion purchase of Nokia, moves that Nadella, or anyone from inside, would almost certainly back, just as such a choice would continue the pivot to devices and services and maintain the company's faith that it can serve two masters, consumer and commercial.

"This notion that this is an enterprise product and this is a consumer product I think is not the way we will approach things," Nadella said last September at Microsoft's day-long conference with Wall Street analysts. "We'll think about these products as sort of meeting end-user needs and enterprise IT needs, and how to balance that."

Choosing an internal candidate was always the easy, conservative choice, according to experts like Peter LaMotte, an analyst with Levick, a Washington, D.C.-based strategic communications consultancy. "It's important that they find someone who continues the brand perception of the company," LaMotte said in a November interview. "Imagine the problems if they bring in someone totally counter [to the brand]."

Nadella's name has been repeated so often that his candidacy has taken on an element of certainty. That's not surprising: Not only is he already at Microsoft -- and boasts a much longer tenure than Bates, Turner or Elop, who came to the company in 2011, 2005 and 2008, respectively -- but he is also a technically-savvy executive more in the mold of Gates than Ballmer, who started in sales. According to numerous reports, Gates has been closely involved in the winnowing of candidates, and Nadella's choice would confirm that.

To some, Gates has been too involved.

Many sell-side Wall Street analysts have hoped that others on the board would overrule Gates and bring in someone from outside. Those analysts pinned hope on an executive with more experience running a major company, even if that meant they were not well-versed in software. That's one of the reasons why Mulally's name lingered so long, and why others, such as Qualcomm COO Steve Mollenkopf and Ericsson CEO Hans Vestberg, have been bandied about.

To Wall Street, an outsider would be more likely to shake up the company, perhaps sell off poor-performing assets like Xbox, or even split the firm into consumer and commercial entities, all to boost the price of the stock, which has been mired for years.

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