Oops, Gates gets it wrong

Bill Gates misspoke while speaking during Microsoft's shareholder meeting, pointing to the challenge around his move to spend less time working for the company.

Bill Gates, regarded as one of the world's brightest and richest, made a mistake.

It was a small error, but one that highlights the larger challenge behind his decision to spend less time working for the massive company he founded 30 years ago.

On Tuesday, at Microsoft's annual shareholder meeting, Gates told the audience that it would be his last meeting as full-time chairman of the company.

In fact, Gates will remain the sole full-time chairman, but next year he will become a part-time employee.

The minor slip-up points to the challenge that Gates and Microsoft face. Even though Microsoft has appointed well-known names like Ray Ozzie, Steve Ballmer and Kevin Turner to fill Gates' shoes, the company in essence faces the impossible.

"The one thing you can't replace, it would be impossible, is the revered status of the founder of the company, who took something small and made it into the biggest," said Jeff Parker, an analyst at Directions on Microsoft, referring to Microsoft's status as the largest software company in the world. "He commanded irreplaceable respect among the troops because he's that guy."

People, especially those on Wall Street, often hate uncertainty, and Microsoft has done a good job carefully plotting out Gates' plan for transitioning his time away from the company and for new minds to take over much of his work, Parker said. Ozzie is expected to take on Gates' visionary work, Ballmer is designated as the leader of the company's business strategy, and Turner will run the sales organization. "And so they don't replace Bill but they kind of shore up the big pieces of the company so there's no void," Parker said.

In 2006, Microsoft laid out Gates' plans, saying that effective July 2008, he would transition out of his day-to-day role in the company in order to spend more time with his charitable foundation. After July, Gates will continue to serve as chairman and also may advise on key projects.

In fact, Gates' intentions were actually made clear earlier than 2006. In 2000, Gates took on the title of chief software architect, handing over the CEO reins to Ballmer. That was around the same time that he and his wife started the Bill and Melinda Gates Foundation. "There's not really any confusion," Parker said.

There's also nothing unique to the challenge that Microsoft faces. "Succession is an age-old problem, going back to every king, queen and emperor," Parker noted.

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Nancy Gohring

IDG News Service
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