NEW YORK — Microsoft CEO Steve Ballmer, who helped Bill Gates transform the company from a tiny startup into the world's most valuable business, announced plans Friday to retire sometime in the next year — a move that presents another challenge to the tech giant as it struggles to move beyond the era of the personal computer.
Microsoft and other companies that thrived in the PC business have been scrambling to win back consumers who increasingly prefer smartphones and tablets. Detractors say Ballmer contributed to the situation by not taking early threats from Apple and Google seriously enough. He consistently pooh-poohed Google as a one-trick company and in 2007 declared: "No chance that the iPhone is going to get any significant market share."
Ballmer's jeers proved premature. Google quickly made important inroads in Internet video, online maps, email and mobile computing. Those successes contributed to the damage that Apple's iPhone and iPad did to Microsoft and its partners in the PC market.
Although it derives some three-quarters of its revenue from sales of software and services to businesses, Microsoft has failed to capture the imagination of consumers who have become more enamored with mobile gadgets. Response to the newest version of its flagship Windows operating system, Windows 8, has been lukewarm.
When Ballmer took the helm in January 2000, the company was worth more than $601 billion. Today, its value is less than half that amount, at nearly $270 billion.
"There is never a perfect time for this type of transition, but now is the right time," Ballmer, 57, said in a statement. He planned to stay on until a replacement is found. Microsoft said the search committee would include Gates.
After the news broke, Microsoft's stock shot up as much as 9 percent and later came within $2 of a 52-week high.
Ballmer's announcement comes less than two months after the company unveiled a sweeping reorganization of its business to catch up with Apple and Google. In his statement, Ballmer noted that Microsoft is moving in a new direction and needs a CEO that will be there for the longer term.
The obvious successor — former Windows head Steven Sinofsky — got booted by Ballmer, he said. Sinofsky left the company last year shortly after the launch of Windows 8. He recently announced that he joined the venture capital firm Andreessen Horowitz.