Microsoft CEO hunt nears end; Mulally to remain at Ford

Mulally's comments reignited the guessing game over who will take over at Microsoft, following the elimination in December of another reported candidate, Qualcomm Inc's Steve Mollenkopf.

(Also see: Qualcomm names Mollenkopf its new CEO, ends Microsoft speculation)

Microsoft said last month it expects to appoint a new CEO early this year. It has been seeking a replacement for Steve Ballmer since the long-time CEO in August announced his plan to retire.

(Also see: Microsoft CEO Steve Ballmer to retire within 12 months)

Sources familiar with the process have told Reuters that Microsoft is down to a "handful" of candidates, including one or more outsiders from the tech industry, former Nokia CEO Stephen Elop and insiders Satya Nadella and Tony Bates.

(Also see: Microsoft narrows CEO shortlist; Bates, Elop, Mulally make the cut: Report I Satya Nadella: The Indian-American who could be the next Microsoft CEO)

Mulally, who has never denied his interest in the Microsoft job, told the Associated Press on Tuesday that he will remain at Ford at least this year. Two people close to the matter told Reuters that Mulally is no longer under consideration for the top job at Microsoft.

"Out of respect for the process and the potential candidates, we don't comment on individual names," a Microsoft spokesman said.

The Ford CEO said he wanted to end the Microsoft speculation "because I have no other plans to do anything other than serve Ford." When the AP asked whether his comments should end concerns from investors about his exit, Mulally said: "You don't have to worry about me leaving."

Ford spokesman Jay Cooney confirmed the comments. After news of the interview, Ford shares rose 1.3 percent in extended trade, while Microsoft shares fell 1.1 percent.

Several prominent Microsoft investors had campaigned behind the scenes for Mulally to succeed Ballmer. But one source familiar with Microsoft's board's discussions said Mulally's candidacy raised questions about "culture and leadership style".

Mulally's apparent interest in the job attracted considerable media attention that overshadowed Ford's product-related announcements, such as the roll-out of the new Mustang, something that frustrated Ford's board of directors, people familiar with the matter said.

© Thomson Reuters 2014