Belluzzo to Leave Microsoft Amid Reorganization

Rick Belluzzo, Microsoft's president and chief operating officer and a force behind the growth of its Xbox and MSN efforts, is leaving the company, the software vendor announced last week.

Belluzzo, 48, will step down as president and COO on May 1 and leave the company in September. The move comes as part of a broader reorganization intended to give greater autonomy to the executives in charge of Microsoft's various product groups, the company said.

Although Microsoft gave no specific reason for the departure, Belluzzo appears to have been the victim of an internal turf war, said Rob Enderle, an analyst at Giga Information Group Inc. in Cambridge, Mass.

With the economy on the slide, Belluzzo was charged with making cutbacks at various business units, Enderle said. His position, which had been closer to that of president than COO, became more like that of a "glorified administrator . . . and that wasn't acceptable to him," Enderle said, adding that at one time, Belluzzo was considered a potential successor to CEO Steve Ballmer.

"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 in the statement announcing his plans.

Departing Microsoft COO Belluzzo
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Departing Microsoft COO Belluzzo
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Another analyst said Belluzzo's departure will be no great loss.

"I don't think it's a particularly significant blow to Microsoft," said David Smith, a senior analyst at Gartner Inc.. "It's hard to put your finger on anything he's done that was particularly spectacular."

Belluzzo may have helped revive Microsoft's MSN online service, but the unit is "still not what you'd call tremendously successful," Smith said. Belluzzo also doesn't appear to be closely involved with the development of .Net, a key project for Microsoft that involves retooling its products to allow for the delivery of software and services over the Internet.

"There's a definite culture clash between Rick and the company," Smith said. "He's very soft-spoken. I don't think that gets you very far at Microsoft."

As part of the reorganization, Microsoft will be divided into seven business units: Windows Client, Knowledge Worker, Server and Tools, Business Solutions, CE/Mobility, MSN, and Home and Entertainment. The leaders of each unit will have "comprehensive operational and financial responsibility and greater accountability," Microsoft said.

Belluzzo, a former CEO at Mountain View, Calif.-based Silicon Graphics Inc., joined Microsoft in September 1999 as vice president of its consumer group. As president and COO, he has overseen Microsoft's worldwide sales and marketing; directed its human resources, finance and licensing operations; and overseen its efforts in the areas of computer games and TV platform software.

- James Niccolai, IDG News Service

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Copyright © 2002 IDG Communications, Inc.

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