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. Last Updated: 07/27/2016

Microsoft Taps Belluzzo To Head Internet Group

NEW YORK -- Microsoft has selected Richard Belluzzo, a computer industry veteran, to head its Internet operations, signaling that its future lies more in electronic commerce than in becoming a media company.

Belluzzo, 45, resigned Monday as the chairman and chief executive officer of Silicon Graphics Inc., a position he held for less than two years. He joined the struggling maker of computer work stations in January 1998, after a 22-year career at Hewlett-Packard Co., where he rose to become the No. 2 executive.

The Wall Street Journal reported Tuesday that Belluzzo was expected to go to Microsoft to head its Internet operations. Microsoft declined to comment, and Belluzzo could not be reached. But industry executives close to Belluzzo said he does plan to head Microsoft's Internet unit, which is now called the Consumer and Commerce Group.

Microsoft Corp.'s strategy for the World Wide Web has been evolving toward commerce for some time. The company, once regarded as a potential media powerhouse, has focused its recent web investments mainly on communications, shopping, travel, scheduling and personal finance. Its plan is essentially to transfer its strength in the personal computer business to the Internet arena f developing popular software that makes people more productive.

At the same time, Microsoft has pulled back from some of its media ventures. Last month, the company sold off its collection of city arts and entertainment guides, MSN Sidewalk, for about $240 million to Ticketmaster Online-Citysearch.

In the Internet era, the distinction between software and services is increasingly blurring. Microsoft intends to funnel the people who use its Internet software to commerce sites in travel, banking and shopping f sites in which Microsoft has a stake or that generate transaction revenues for it.

"The strategy now is to use its software strengths to create a transaction backbone for the Internet,'' said Mark Anderson, president of Technology Alliance Partners, a research firm. "And Microsoft is really pulling back from the media stuff.''

Belluzzo made his industry reputation as the executive largely responsible for building Hewlett-Packard's computer printer business into a consumer category. As a young executive, Belluzzo pushed to lower manufacturing costs for printers to make them affordable and marketed them aggressively through retailers.

For Hewlett-Packard, the printer business now generates sales of more than $17 billion a year. Before he left for Silicon Graphics, Belluzzo also oversaw the strategy for the reinvigorating Hewlett-Packard's personal computer business, which has thrived in the last couple of years.