Rick Belluzzo: Plans to start his own firm

"I decided it was the right time to pursue my goal of leading my own company," Mr Belluzzo said.

Microsoft said it had no plans to replace Mr Belluzzo, and was transferring many of his powers to chief executive Steve Ballmer.

Analysts' questions

The announcement surprised many Wall Street observers, who had seen Mr Belluzzo as a future Microsoft chief executive.

He had only joined the firm in 1999, after spells at Hewlett-Packard and Silicon Graphics, and rose rapidly from vice-president to president.

"You don't normally put someone in that role in order to take him out of there a few months later," observed Rob Enderle, an analyst with Giga Information Group.

But Mr Belluzzo scoffed at reports he had been being groomed for the chief executive role.

"With chairman Bill Gates and Mr Ballmer set to be around for some time... I never thought that was my ambition here," he said.

Before being appointed president, Mr Belluzzo's work focussed on the Xbox gaming system and the MSN instant messaging service.

"Rick has made important contributions throughout his tenure here at Microsoft," Mr Gates said.

Company shake-up

Following Mr Belluzzo's departure, all six of Microsoft's business units will report to Mr Ballmer, with divisions given more responsibility for their own fiscal and operational performance.

Analysts said the shake-up would make it easier for Microsoft to split itself into multiple companies.

Microsoft was briefly ordered to split itself up in its lengthy antitrust battle with the US government, but the ruling was overturned.

Microsoft says the restructuring is nothing to do with the antitrust trial.

Mr Belluzzo said he would retain a consulting role with Microsoft until September to "ensure a smooth transition."