02:50 PM PDT on Thursday, June 15, 2006

Associated Press

REDMOND, Wash. - Microsoft Corp. Chairman Bill Gates announced Thursday that he will transition from day-to-day responsibilities in the company to concentrate on the charitable work of the Bill & Melinda Gates Foundation. Gates will continue on as the company's chairman after transferring his duties over a two-year period.

"This was a hard decision for me," said Gates, who founded the world's largest software company with childhood friend Paul Allen. "I'm very lucky to have two passions that I feel are so important and so challenging. As I prepare for this change, I firmly believe the road ahead for Microsoft is as bright as ever."

Microsoft's Chief Technical Officer Ray Ozzie will immediately assume Gate's title as chief software architect and begin working side by side with Gates on overseeing all software technical design. Chief Technical Officer Craig Mundie will immediately take the new title of chief research and strategy officer and will work with Gates in those areas. Mundie also will partner with general counsel Brad Smith to guide Microsoft's intellectual property and technology policy efforts.

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Microsoft Chairman Bill Gates announces that he will transition out of his day-to-day role in the company to spend more time on the Gates Foundation.

In January 2000, Gates assumed the role of chief software architect and Steve Ballmer took over the role of chief executive officer, responsible for all day-to-day operations and company business strategy.

"Bill and I are confident we've got a great team that can step up to fill his shoes and drive Microsoft innovation forward without missing a beat," Ballmer said. "We will continue to hire the world's best technical talent and give them the tools to do their best work, and we will continue to tackle the biggest challenges and opportunities for our customers by investing for the long term."

Gates, 50, and Allen started Microsoft in 1975. He took Microsoft public in 1986 and was the company's chairman and CEO until 2000, the year he and his wife formed the Bill & Melinda Gates Foundation, whose assets now total $29.1 billion. For the past six years Gates has focused on Microsoft's software development as the company's chairman and chief software architect.

Ozzie, 50, worked on the first electronic spreadsheet, VisiCalc, in the early 1980s. In 1983, he joined Lotus Development Corp. - Microsoft's archrival at the time - to develop Lotus Symphony, a business software suite. In1984, Ozzie formed Iris Associates Inc. to develop Lotus Notes, and in founded Groove Networks, where he developed Groove Virtual Office. Microsoft acquired Groove Networks in April 2005 and named Ozzie chief technical officer.

Mundie, 56, joined Microsoft in 1992 to create and run its Consumer Platforms Division, which was responsible for non-personal computer software. Mundie also started Microsoft's digital TV efforts. His current responsibilities include global technology policy and a variety of technical and business incubation efforts.

Ozzie and Mundie will continue to report to Gates. At an appropriate time during the two-year transition period, they will shift to reporting to Ballmer.