When Billionaire Warren Buffett (NYSE:BRK.B), one of the richest men in the world, was asked on a Bloomberg television interview about whether his friend Bill Gates would return as CEO to Microsoft (NASDAQ:MSFT) to fill in for Steve Ballmer, the current chief who is retiring in less than a year, he replied in the negative. According to Buffett, Gates already has a full-time job heading the Bill & Melinda Gates Foundation, a huge charitable organization.
Since Gates himself has been unavailable for comment, Buffett's opinion is the next best thing. The two men are close friends. Gates serves on the board of Buffett's Berkshire Hathaway Inc., which is Buffett's conglomerate. Additionally, the Gates Foundation has been entrusted with gradually distributing Buffett's considerable fortune to charity.
Who Will Head Microsoft?
Gates apparent reluctance to head Microsoft, even as an interim CEO, puts Microsoft in a quandary because Ballmer's shoes are not easy to fill. After Ballmer announced his plans to leave Redmond, Washington, in August, within 12 months, numerous speculations have abounded on who will be able to lead Microsoft. The task of CEO of Microsoft requires a rare combination of managerial aptitude, tech familiarity and uncommon mental agility.
Mark Hurd, President of Oracle, has told CNBC, that he likes his current job as a leading software developer executive and is not planning on leaving anytime soon. Other possible candidates under consideration are Alan Mulally, CEO of Ford Motor (NYSE:F); Stephen Elop, CEO of Nokia's Windows Phone; Kevin Turner, COO of Nokia's Windows Phone; Reed Hastings, CEO of Netflix (NASDAQ:NFLX); John Donahoe, CEO of eBay (NASDAQ:EBAY); Jony Ive, Apple's (NASDAQ:AAPL) designer; and Jack Dorsey, co-founder of Twitter (NYSE:TWTR). In fact, things have reached such a point of indecision that even arch rival, Apple's CEO, is under consideration, with a plan to possibly entice, Tim Cook.
Looking at this list, it's easy to see that the only person who has the breath of vision and industry expertise to handle the corporate giant after Ballmer is Gates himself. Others may have corporate experience, but not the inside knowledge necessary to help Microsoft overcome its current difficulties and become a leading force in the future of technological innovation. Recently, for instance, Microsoft took a $900 million hit when it had to buy back unsold Surface inventory. Surface was supposed to be Microsoft's answer to Apple's iPad, but it failed to make the grade and win user endorsement as a worthy alternative.
Is Gates Really Out of the Picture?
Speculation runs in two mutually different directions. Microsoft company officials say that they cannot envision Gates returning back to his former position as CEO when Ballmer has left. They can only see him in an advisory capacity, approving the next candidate. However, industry analysts, beg to differ. They contend that only Bill Gates has the necessary visionary skills to turn the company's misfortunes around and secure a new future.
Just like Steve Jobs, who returned to serve as interim chief for 36 months after a full decade of exile when Apple was in the same dilemma, Bill Gates may have to do the same. Moreover, many business analysts don't but Buffett's alibi that the Bill and Melinda Gates Foundation needs Gates' full time attention. Judging by Melinda Gates' contribution to the Foundation, she appears more than qualified to run things in his absence.
What Challenges Will The New CEO Face?
It's important to note that Buffett was not on Bloomberg to discuss Microsoft, but had actually been invited with his son and grandson to talk about his new book, "40 Chances: Finding Hope in a Hungry World." Moreover, his statement was neither validated nor denied by Gates at any time. So the question of whether Gates will or will not play an active role in shaping Microsoft's future remains a speculative one.
However, whoever Gates decides who will fill the position of CEO after Ballmer's exit will not have an easy job ahead of him, even if it is Gates himself. Here's the problem in a nutshell: When it comes to leading the future of technological revolutions, Microsoft has not been as formidable a contender as it had hoped. A new generation of consumers has become enchanted by Google's formidable search domination, and the robust functionality and convenience of iOS and Android phones when it comes to accessing the Internet.
A decade ago, Microsoft was a leader in almost all things digital, but since then much water has passed under the bridge. Microsoft was great before cloud computing, before advances in mobile devices and before social networking, but none of these new technologies actually need a Microsoft platform to perform optimally.
The new CEO will have to map out a fresh plan to help it become a key player in conceptualizing the technological future. This plan would by no means be an easy task, and the only person who apparently has the experience and vision to make it happen hopefully is interested in fighting the battle again like Steve Jobs was. Should Gates come back as Microsoft's CEO, expect the stock to rally.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.