Microsoft CEO Search: Stephen Elop Could Cut Xbox, Bing And Focus On Office If Made Steve Ballmer's Successor

on November 08 2013 12:42 PM

It’s been more than two months since Microsoft CEO Steve Ballmer announced his plan to retire from Microsoft Corporation (NASDAQ:MSFT), and the Redmond, Wash.-based tech giant still hasn’t announced who will replace him. There are several possibilities, and one of the front-runners is Stephen Elop, the former chief executive of Nokia Corporation (NYSE:NOK) who rejoined Microsoft in September as the new head of devices after Microsoft purchased Nokia’s mobile-phone business for $7.2 billion.

Again, nothing is official, but Bloomberg reported Friday that 49-year-old Elop would make big changes if he got the job. Most notably, he would move away from Windows, sell Xbox and even kill off the Bing search engine to focus on providing the Microsoft Office suite of software on smartphones and tablets.

In the past, Microsoft has created applications like Office to drive users to the Windows operating system. Under Ballmer, however, Microsoft hasn’t been successful at creating its own mobile devices and has been reluctant to adapt Office for other operating systems, like Apple's iOS and Google’s Android.

Elop wants to flip that and have Microsoft focus on selling Office rather than use Office to promote sales of Windows and Windows-based devices.

The move would be consistent with Elop’s past. When he was the head of the Microsoft Office team, he pushed for new ways to sell the software. At Nokia, Elop cancelled the Symbian phone software and instead moved Nokia devices toward the Windows Mobile OS.

Elop cut 40,000 jobs at Nokia and cut the company’s operating expenses by 50 percent. If he's made CEO at Microsoft, similar cuts could be in the works. In addition to job cuts, Elop would be willing to cut some areas of Microsoft’s massive business, such as search and video games.

Pulling the plug on Bing makes sense as it has proven costly done little to erode the market share currently dominated by Google.

His reported willingness to sell the Xbox game console, however, is controversial. Xbox is currently one of Microsoft’s most successful business verticals, and the upcoming Xbox One console sold out prior to its release.

But an analyst recently suggested that selling Bing and Xbox could lift fiscal 2015 earnings by 40 percent, something that Microsoft investors, frustrated by stagnant performance on Wall Street during recent years, can’t ignore. If Elop agrees that Xbox isn’t a crucial part of Microsoft’s future strategy, selling would be a move he’d be willing to make. 

Also in the running for Microsoft CEO are Microsoft's current strategy chief, Tony Bates, and Microsoft's vice president of the "Cloud and Enterprise" group, Satya Nadella. 

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