This story was written by Keith Dawson for the Industry Standard's Media Grok email newsletter. It is archived here for informational purposes only because The Standard's site is no more. This material is Copyright 1999-2001 by Standard Media.

THE INDUSTRY STANDARD MAGAZINE
A Bigger, Longer Shortcut: Media Reports Belluzzo Jumps to MS ...
Aug 24 1999 12:00 AM PDT



Is there no end to Microsoft (MSFT)'s news dominance? Rounding out a boffo Monday that had the new Bill and Melinda Gates Foundation donating $6 billion to vaccine development and a Newsweek cover valentine to Papa Bill, it appears Microsoft may finally have found a leader for its Net services group.

Silicon Graphics (SGI) Inc. was mum Monday on where its chief exec Rick Belluzzo was headed, but news reports soon pegged him beating a retreat to Microsoft's Net services group. Belluzzo, who returned SGI to profitability after seven quarters of losses, is bound for Redmond just two weeks after announcing SGI would undergo its third restructuring in three years. SGI said former sales exec and board member Robert Bishop will take over as CEO. As of early this morning, the New York Times and Los Angeles Times posted Bloomberg wire feed that reported Belluzzo's jump but not his destination. Wired News and the Washington Post stuck with Reuters copy that was likewise in the dark over Belluzzo's Redmond move. Ditto for CBS (dossier) MarketWatch's rehashed PR NewsWire copy.

But the Wall Street Journal's Don Clark had the word on Belluzzo's ticket to Redmond early enough to make it into this morning's print edition. He pointed out that Microsoft could use Belluzzo's background in operations and finance for its Net division, and wondered what benefit ex-peddler Bishop's business expertise - in overseas sales operations - will offer SGI in light of the reorg. News.com's Stephen Shankland followed up on the Journal's report of Belluzzo's Redmond destination and penned a skeptical analysis of SGI's future. Shankland interpreted Bishop's bland corporate-speak - "We are not anticipating any further executive changes at this time" - to imply that SGI had been feeling the pulse of other top execs, including CFO Steve Gomo.

Bishop insisted he will follow the strategic direction that Belluzzo articulated just two weeks ago - pro Linux-on-Merced, anti-NT, a loss of 1,500 jobs. But News.com posed the obvious question: If the strategy was sound, why did Belluzzo leave?

The answer is equally obvious. "If you're Rick Belluzzo, you only make moves like this if there's something very wrong with your current situation," Banc of America Securities analyst Kurt Kang told the San Jose Mercury News' Tom Quinlan in a report that leaned hard on the chilly reception that SGI's new plan had received on Wall Street. The San Francisco Chronicle's Henry Norr, meanwhile, tagged Belluzzo as frustrated in his efforts to revive the company. "More and more, it's become clear that this thing wasn't headed in the right direction,'' Dataquest analyst Kimball Brown told Norr. "I think he just got tired of trying to turn it around.''

TheStreet.com scored with Eric Moskowitz's early report on Belluzzo's bailing and recalled that his arrival at SGI just 18 months ago had been cheered by the tech community as well as Wall Street and had goosed SGI's stock. Just before midnight EST, fellow Street scribe Adam Lashinsky snuck in with juicy details on Belluzzo's Microsoft hiring that he attributed to four sources "familiar with Belluzzo's plans, including two who have discussed them with Belluzzo directly." After noting that Microsoft's consumer and commerce group - which includes MSN, WebTV, and interactive-television efforts - has been a sore spot for years because of its inability to match AOL (dossier), Lashinsky called Belluzzo an unlikely choice for the job. Belluzzo is a capable operating executive, Lashinsky argued, but not the seasoned media or Net exec to whom many had hoped Redmond would turn.

Which means Belluzzo enters Microsoft with plenty of pressure and little hope for a honeymoon. Will he be able to take it? The last top exec to run the entire operation was Pete Higgins, who took a leave of absence last November and hasn't been heard from since.

SGI Surprise - Chief Resigns
The Industry Standard

SGI Names Bishop New CEO, Chairman
CBS Marketwatch

Silicon Graphics' Top Officer Resigns Post (Bloomberg)
New York Times
[Registration required.]

Top SGI Guy: Bye Bye (Reuters)
Wired

SGI Chief Belluzzo Resigns
San Francisco Chronicle

Silicon Graphics' Belluzzo Quits as Chief Executive and Chairman
Wall Street Journal
[Registration required.]

Departing SGI Chief May Join Microsoft
News.com

New SGI CEO Emphasizes Stability
News.com

Belluzzo Quits at SGI
Mercury Center

SGI CEO Belluzzo Heads for the Door
TheStreet.com
[Registration required.]

Ex-SGI Chief Belluzzo to Run Microsoft's Internet Businesses
TheStreet.com
[Registration required.]