Microsoft announced Friday that CEO Steve Ballmer will retire within the next year.

 Ballmer out

Microsoft announced Friday morning that Chief Executive Officer Steve Ballmer has decided to retire as CEO within the year and a special committee of the board led Bill Gates will help pick his successor.

In a press release put out Friday by Microsoft, Ballmer said that this wasn’t the perfect time for him to retire but it was the best time.

“My original thoughts on timing would have had my retirement happen in the middle of our company’s transformation to a devices and services company,” he said in a press release. “We need a CEO who will be here longer term for this new direction.”

“There is never a perfect time for this type of transition, but now is the right time,” he said.

“We’re fortunate to have Steve in his role until the new CEO assumes these duties,” Chairman of the Board Bill Gates said in a statement.

The company said it will consider both internal and external candidates for the position.

Shares jumped 8.1 percent to $35 in pre-market trading. That momentum continued during the early trading day.

microsoft stock Ballmer out

Ballmer’s legacy

Months before Microsoft announced the end of the Ballmer legacy, the company announced a reorganization to make it more agile for a future as a device and services company. In many ways, this could be seen as an attempt to hastily make up for a decade lost due to Ballmer’s refusal to push his company to innovate as the public’s paradigm of computing dramatically changed.

Just weeks before the company announced Ballmer’s retirement, the final chapter of his legacy was written in the form of a shareholder lawsuit filed against Microsoft and its executives. The lawsuit alleged Microsoft’s executive team mislead investors to the success of the Surface, and the evidence is pretty damning. While the Surface sat unsold on store shelves and in warehouses, Ballmer’s executives said the tablet had a “really strong momentum in China” and a “strong satisfaction rate.”

Ballmer’s legacy will be defined by a loss of Microsoft’s dominance in the personal computing sector. According to FactSheet, Microsoft’s investors have lost 20 percent of their investment since Ballmer took over the duties as CEO from Bill Gates in 2000, with the stock losing 36 percent of its average listed value. It will be interesting to see his successor’s plans to reverse this trend. Microsoft’s restructuring in June left no apparent successor to Ballmer, so it’s anyone’s guess as to who will replace him.

Source: Microsoft