Long-time friend Steve Ballmer has been appointed president of Microsoft and possible successor to the world's richest man.

Bill Gates, who is 42, says he has no intention of retiring soon and will continue as chairman and chief executive officer. He says he will now concentrate on the long-term development of new products.

"In no way am I pulling back," said Mr Gates.

Steve Bullmer, new president of Microsoft

Steve Ballmer masterminded Microsoft's aggressive marketing and sales campaigns which landed the company in trouble with the US Department of Justice.

In a memo to employees, Bill Gates said the president's role would be "to delight our customers."

He will be charge of boosting business discipline, getting closer to customers, and creating a more flexible corporation.

But chief technology officer Nathan Myhrvold, who planned Microsoft's assault on the internet, will continue to report directly to Mr. Gates.

Court case looming

The world's biggest software manufacturer has been accused of squeezing out rivals and monopolising the market. But the company has vigorously defended itself against the claim.

Mr Ballmer may take a more high profile role in the public defence of Microsoft in the future.

Bill Gates, after testifying before Congress on the matter in the spring, declined to appear before the Senate Judiciary Committee on Thursday in a session featuring rivals Oracle and IBM.

Steve Ballmer said that as a result of his promotion, he may be free "to beat the drum even louder" in the interests of the company.

His more charismatic personality could help modify Microsoft's public image.

Mr Ballmer joined Microsoft in l980 after working for Procter and Gamble. He is a contemporary of Mr Gates at Harvard University, and attended Stanford Business School.