Barry Sweet/AP Microsoft names new CEO: Steve Ballmer

Gates announced Thursday that he is giving up day-to-day leadership of the company he co-founded in 1975 to return "to what I love most — focusing on technologies for the future."

"I might be threatening to write code," Gates joked. "That's something that I haven't been able to do in three or four years."

Ballmer was named chief executive of the software giant, formalizing more than a year and a half of change at the software company in both management and vision. He inherited the job from Gates, who will remain Microsoft's chairman and become a full-time "software architect."

Microsoft has made Gates the world's wealthiest person, with a fortune estimated at more than $80 billion. His company has become the dominant force in the software industry, with its Windows operating systems on more than 90 percent of all personal computers.

Gates said he planned to dedicate his time to fashioning and promoting Microsoft's flagship operating system. The latest version, Windows 2000 for business computers, is scheduled for release on Feb. 17.

Barry Sweet/AP Microsoft's Steve Ballmer, left, and Bill Gates announce change at the top

"Clearly, Gates is bored," said Michael Gartenberg, vice president of the Gartner Group, a technology research firm. "He loves innovation, and he loves to play with the technology. This will let him do that."

Ballmer, 43, was appointed Microsoft president in July 1998 after being brought into the company eight years before by Gates. The two met while attending Harvard University. Ballmer was Gates' best man when he married Melinda French in 1994.

After Gates hired Ballmer, the two reportedly had some rocky times. One anecdote says that in the spring of 1985, as Microsoft's deadline to produce Windows slipped further and further behind, Gates called Ballmer into his office and threatened to fire him if Windows wasn't on the shelves by the end of the year (though few people believe Gates, with a notoriously bad temper, was ever serious about firing Ballmer).

Windows was ready by that November.

With Ballmer at the helm, Microsoft will likely become more aggressive as it enters new technology markets with its new Internet strategy. As Ballmer announced Thursday, the company will market new software that can be accessed through any device — from personal computers and handhelds to cell phones and toasters — via the Internet.

Ballmer is seen as rather loud and blustery — he didn't bother with a microphone at Thursday's news conference announcing his new role — but his business credentials are impressive. As Microsoft's longtime vice president of sales, Ballmer helped make Windows a household name through the 1990s.

Like Gates, Ballmer has already staked out a position against breaking up the company, which may be sought by the federal government and 19 states suing Microsoft over alleged antitrust violations.

Ballmer said a breakup would be "absolutely reckless and irresponsible" and "the single greatest disservice that anybody could do to consumers in this country."

David Wu, a financial analyst at ABN Amro in San Francisco, said few differences exist between Ballmer and Gates.

"Other than the fact that Steve Ballmer is less rich than Bill Gates, those two are Siamese twins," Wu said.