4 April 2002 Rick Belluzzo, president and chief operating officer (COO) at software giant Microsoft, is to leave the company as part of a major reorganisation.
His departure is believed to be a result of the lacklustre performances of several of its consumer products that he managed, including its Microsoft Network (MSN) Internet service, its Xbox games console and the company’s interactive TV projects.
Belluzzo joined Microsoft in September 1999 as a group vice president and was promoted to COO in February 2000, a month after Steve Ballmer took over from founder Bill Gates as CEO.
Previously, Belluzzo had enjoyed a successful career at graphics workstation vendor SGI and systems vendor Hewlett-Packard. However, his brief tenure as COO was punctuated by much wrangling with the aggressive and hard-nosed Ballmer.
Belluzzo is blamed for a number of misjudgements that undermined the performance of the media division which he ran. In particular, Microsoft’s discounting policy for MSN on new PCs undermined the consumer division’s profitability.
He has also been blamed for the lacklustre launch of the Xbox games console. Reasonably strong sales in North America have not made up for disappointing sales in both Europe and Japan where Sony’s rival Playstation 2 is outselling Xbox by up to 25-to-1, according to reports.
Belluzzo will stand down in May 2002. However, no replacement for Belluzzo is planned, which suggests that there was a substantial amount of overlap between his role and that of CEO Steve Ballmer.
At the same time, Microsoft has unveiled details of a new re-organisation intended to make clearer the trading and financial performance of its seven divisions.
In a statement Microsoft said: “The leaders of each of the company’s core businesses – Windows Client, Knowledge Worker, Server and Tools, Business Solutions, CE/Mobility [mobile division], MSN and Home &Entertainment will have independent operational and financial responsibility.”