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Microsoft says new CEO won’t be named until early 2014

(Stephen Brashear/Getty Images)

Microsoft director John W. Thompson said Tuesday in a post on the company's official blog that Microsoft expects to complete the search for its new CEO in 2014. It's an unusual move to provide an update on the timing of the decision—companies are known to remain hush-hush until the big reveal. The announcement comes amid much speculation not only about who will succeed Steve Ballmer, the current Microsoft chief executive, but about when that successor will be named.

In the post, Thompson, who chairs the board's search committee, said the company "cast a wide net across a number of different industries and skill sets" to find a replacement for Ballmer, who announced in August that he would be retiring within the next year. Thompson also added that Microsoft began by identifying more than "100 possible candidates, talked with several dozen, and then focused our energy intensely on a group of about 20 individuals." He said the group had since narrowed, and that the search is expected to wrap up early in the new year.

Though there are few hints at the front-runners--Thompson wrote in the post that the board has been considering both internal and external candidates--he does cite Chairman Bill Gates' comments from the company's November shareholder meeting. "He noted that this is a complex role to fill," Thompson wrote, "involving a complex business model and the ability to lead a highly technical organization and work with top technical talent."

Recent reports have suggested that Microsoft employees, antsy about the management uncertainty, had been hoping for an announcement before the end of the year.

The speculation may have already played a role in accelerating one promotion: Qualcomm unexpectedly named its chief operating officer, Steve Mollenkopf, as its chief executive last week, after Bloomberg reported he was being considered for the Microsoft job. All the talk about Microsoft's succession has also threatened to be a distraction, reports Bloomberg, at Ford Motor Co. Ford CEO Alan Mulally is also frequently mentioned as a potential candidate for the Microsoft job. Several Microsoft insiders' names are often mentioned as well, such as Tony Bates and Satya Nadella, both executive vice presidents.

This chatter is one reason corporate governance experts say that while providing an official update on a CEO search is unusual for many companies, it's not all that surprising in Microsoft's case. "One of the most difficult balancing acts in the boardroom is the release of information about succession," says Nell Minow, co-founder of the Corporate Library, now part of the governance research firm GMI Ratings. "Companies tend to dance around a lot."

But in Microsoft's case, Minow says, the company has "been under so much pressure. I'm not surprised that they would be a little more specific."

In addition to addressing the rumor mill among investors and the press, the company's update could serve to help to focus members of the board on their decision, says Dennis Carey, vice chairman of the executive search firm Korn/Ferry and co-author of the recent book Boards That LeadWhile he believes "less is better" when it comes to discussing CEO succession, the gyrations of the stock market in response to rumored candidates do "affect the mental calculus within that boardroom."

"The initial signals from Wall Street can put a candidate in the front seat or the back seat," Carey says. By publicly saying the decision is not imminent, the search committee could help to eliminate the distraction of the market.

Still, Microsoft's update is unlikely to quiet the whisperings about the tech giant's next chief executive, who will become only the company's third CEO in its 38-year history. Whoever it is will face the tremendous task of overhauling a sprawling company that has fallen behind its rivals. That means the parlor game of picking Microsoft's next leader is unlikely to fade among investors and the press anytime soon, Carey says. "The consequences here are enormous."

Jena McGregor is a columnist for On Leadership.

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