Microsoft president Rick Belluzzo resigns as company announces restructuring

Thursday, April 4th 2002, 12:00 am

By: News On 6

SEATTLE (AP) _ Rick Belluzzo, who has resigned as president and chief operating officer of Microsoft Corp., says the company's future growth hinges on a restructuring plan he helped create.

``We needed to really change the orientation of the business to where business owners could not only (control) product development but also how the product goes to market and so on,'' Belluzzo said in an interview Wednesday with The Associated Press.

Belluzzo announced Wednesday that he was resigning after a little more than a year on the job. He said he was a key decision-maker in the restructuring plan _ also announced that day _ which will let different parts of the company operate more autonomously.

Analysts said the restructuring could make it easier for Microsoft to split into multiple companies. A judge ordered the company to break up during its antitrust trial, but the ruling was later overturned. Microsoft said Wednesday the restructuring had nothing to do with the trial.

Some analysts have questioned Microsoft's long-term growth prospects in recent months, and many praised the restructuring announced Wednesday.

Rob Enderle, an analyst with Giga Information Group, said the company is likely also hoping to make its units more fiscally responsible at a time when all technology companies _ including Microsoft _ are struggling to make profit targets.

``They're having some difficult budgetary problems,'' Enderle said. ``Revenue's off and clearly they're going to have to do some cost-cutting.''

Belluzzo said he realized in January that the restructuring plans would make his job redundant, and saw that as an opportunity to pursue his long-term goal of being a chief executive at a company.

He said he plans to stay in his position until May, and to stay with the company until September to organize the transition.

Enderle said the resignation was a surprise because many assumed Belluzzo was being groomed to replace chief executive Steve Ballmer. But Belluzzo said he never thought he would replace either Ballmer or Chairman Bill Gates.

``I think Bill and Steve will be around for some time ... so I never thought that was my ambition here.''

Rick Sherlund, an analyst with Goldman Sachs, said he doubted the move reflected any displeasure in Belluzzo's performance. In fact, Belluzzo is largely thought to have been highly regarded by Ballmer and Gates.

Belluzzo, a longtime computer and software industry executive, joined Microsoft in September 1999 and held several senior positions before being promoted to president and COO in February 2001.

Before becoming president, Belluzzo focused much of his attention on the company's consumer operations, including its Xbox game system, its MSN Messenger instant messaging system and its Ultimate TV service. Belluzzo also was instrumental early on in the company's .NET initiative for delivering a variety of services over the Internet.

All of these consumer-oriented projects have been the hallmark of Microsoft's efforts to become more of a consumer-products company, although most of them have yet to make money for the company.

Before joining Microsoft, Belluzzo was briefly chief executive of Silicon Graphics, and previously spent 23 years at Hewlett-Packard.