Roger Yu, USA TODAY
Microsoft says Steve Ballmer will retire as the company's CEO within 12 months, as the tech giant navigates a rapidly-changing computer market.
In a statement released Friday, Microsoft said Ballmer, 57, will stay on to help search for his successor.
"There is never a perfect time for this type of transition, but now is the right time," Ballmer said in the statement.
Shares of Microsoft surged 7% in early trading off the announcement.
Steve Ballmer's ego may be taking a hit Friday as the stock market jumps on the news that he will step down as CEO of Microsoft, but it also made him and his colleagues instantly richer - at least on paper.
Ballmer owns about 333.3 million shares, or about $10.8 billion worth of the stock, according to Microsoft's latest proxy. With the stock up about 5.2% in late morning trading, he's about $560 million richer.
Bill Gates, Microsoft's chairman, owns about $14.9 billion worth of the stock, which means he's about $774 million better off today than yesterday.
Microsoft's executive and directors as a group -- 19 individuals -- collectively are $1.34 billion wealthier today.
AllThingsD, the technology news site that pointed out Ballmer's sudden windfall from his resignation, also says Microsoft's market capitalization fell about $330 million during his tenure as CEO.
Microsoft will appoint a special committee - which will include board chairman and founder Bill Gates - to search for Ballmer's replacement. "I'll work closely with the other members of the board to identify a great new CEO," said Gates.
Ballmer joined the Redmond, Wash., company in 1980 as its first business manager before becoming CEO in 2000. During that time, he oversaw several key initiatives including the launch of the Xbox video game console and Bing search engine, the $8.5 billion acquisition of Skype and several iterations of its Windows operating system.
Ballmer's eventual departure from the tech giant arrives during a significant market transition. With more consumers shifting from desktop and laptop computers to mobile devices, companies including Microsoft are scrambling to keep up.
In October, Microsoft will still start rolling out Windows 8.1, the update to its Windows operating system designed to work across traditional computers, tablets and smartphones. The company has also dipped into the tablet business with the launch of its Surface devices.