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Elop rises, Larson-Green falls in Microsoft CEO handicapping

Mark Hachman | Sept. 4, 2013
With Stephen Elop tapped to run Microsoft's devices division, the former Microsoft exec has jumped ahead in the pack of candidates vying to replace CEO Steve Ballmer.

By any measure, Stephen Elop's star just rose overnight.

The former head of Microsoft's Business Division was tapped to lead an expanded devices business at Microsoft, formed by absorbing more than 32,000 Nokia employees in a $7 billion dollar deal announced late on Monday.

Many now consider him to be the front-runner in a race between several internal and external candidates to succeed Steve Ballmer, Microsoft's chief executive, who said recently that he would step down in a year's time. But Elop's ascension has probably lowered the fortunes of Julie Larson-Green, who was just named executive vice president of Microsoft's Devices and Studios division—and who will soon report to Elop.

If it's true that phones are now the catalyst of Windows, as Microsoft's presentation to analysts on Monday said, then Elop is now one of the most important figures at Microsoft—even though he won't work there in an official capacity until the deal closes, expected during the first quarter of 2014.

"Stephen will go from external [candidate] to internal," Ballmer toldThe Seattle Times. "The board will continue [to look at] all appropriate candidates through that process."

One source inside the company said that some scuttlebutt within Microsoft pegs Elop as the heir apparent—even as, the source admits, it's premature, and possibly wrong. Elop would join Microsoft early next year, on the back half of Ballmer's self-imposed 12-month timetable, and would immediately be asked to lead the Devices team. He could still then jump to the CEO spot, but the sensitivity of the new position could make that unlikely. Larson-Green could still be promoted over Elop, but the traditions of management hierarchy make that an outside chance.

"Since Elop will be reporting to Ballmer directly, and apparently EVP Julie Larson-Green will be reporting to Elop after the acquisition is completed, it feels like Elop is being positioned for an eventual CEO move," Brian Proffitt, an adjunct instructor at the Mendoza College of Business at Notre Dame, said in an email. "But after Elop came on board Nokia as CEO in 2008, that company went to heck in a handbasket. The question is, was Nokia always doomed to fail and Elop implemented the best soft landing that he could, or was it his involvement that sent Nokia from a $40 billion market cap to a $15 billion figure in just under three years? The answer to that should determine his chances of being picked as CEO."

A betting man would give Elop the edge. Ladbrokes—probably not the measure of such things, but as a yardstick of public opinion—gives Elop 2:5 odds, as in bet $5 to win $2, that Elop will replace Ballmer. Larson-Green doesn't even appear on the house's short list. Instead, Ladbrokes favors Facebook chief operating officer Sheryl Sandberg (7:1) and former Windows exe Steven Sinofsky (12:1) behind Elop.


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