Gates to don tech advisor hat instead of chairman's

Bill Gates, the company's first CEO, will step aside as chairman, devote more time to product development as a director and continue running his philanthropic foundation. John Thompson, the director who led the CEO search, becomes chairman. Gates said in an online video that he'll spend part of his time at Microsoft as technology adviser.

"During this time of transformation, there is no better person to lead Microsoft than Satya Nadella," said Gates, who remains a member of Microsoft's board. "Satya is a proven leader with hard-core engineering skills, business vision and the ability to bring people together."

Gates, who along with Paul Allen founded the company in 1975, was the first CEO. He left that role in 2000, succeeded by Ballmer. Ballmer and Gates were hallmates in a Harvard University dorm before Gates convinced Ballmer to leave business school in 1980 to join Microsoft as its 30th employee.

"I'll have over a third of my time available to meet with product groups," Gates said. "It will be fun to define this next round of products, working together. There's a lot of opportunity in front of us, and it's exciting that we have a strong leader to take us there."

In 2000, when Gates stepped down as CEO, Ballmer took over, with Gates remaining as chairman. Gates, who has since devoted much of his time to his foundation, left day-to-day duties at the company in 2008. Gates said Jan. 21 that he'll work on philanthropy for the rest of his life.