Shares of Microsoft Corp climbed as much as 2.3 percent on Thursday after influential hedge fund manager David Einhorn caused a stir on Wall Street by calling on Chief Executive Officer Steve Ballmer to step down.

The fund manager, who made his name warning about Lehman Brothers' financial health before the investment bank's collapse, accused Ballmer on Wednesday of being stuck in the past, launching the sharpest attack yet by a high-profile investor against the company's leadership.

Einhorn's comments echo what some investors have said for some years in private.

His continued presence is the biggest overhang on Microsoft's stock, Einhorn told fellow fund managers at the annual Ira Sohn Investment Research Conference in New York.

Shares in the world's largest software company, which have been static for over a decade, were up 1.8 percent at $24.63 in late morning trading after rising as high as $24.75 earlier in the session.

Microsoft -- the largest U.S. company by market value in the late 1990s -- has been overtaken by Apple Inc and International Business Machines Corp in market value, and is no longer seen as a dominating force in technology after a failure to capitalize on Internet and mobile markets.

Before Thursday's gain, the stock had been down 6 percent in the past two weeks after Microsoft agreed to pay $8.5 billion for Internet phone service Skype, a move that mystified many investors.

Einhorn said it was time for Microsoft to consider strategic alternatives for its money-losing online business, which has so far failed to win share from Google Inc

The online services unit, which runs the Bing search engine and MSN Web portal, had a loss of $726 million last quarter and has now lost $7 billion in four years.

What it boils down to is that Microsoft has had a load of initiatives which haven't shown traction yet, said one U.S. equity fund manager at an investment house featuring on the list of Microsoft's top 40 largest shareholders. The most recent one is to buy Skype, and the perception on that is that it is over-valued. We won't know what revenue synergies are until 2,3 years down the road.

Microsoft created the platform on which Google and the Internet can go forward, and it's not exactly yesterday's technology, but they do have to connect more with the mobile computing world and they haven't really done that.

(Reporting by Edwin Chan, Sinead Carew and Paul Thomasch, writing by Edwin Chan; Editing by Lisa Von Ahn, Dave Zimmerman)