By Bill Rigby
SEATTLE (Reuters) - The board member leading Microsoft Corp's search for a new chief executive said on Tuesday he expects an appointment to be made early next year, the first time the board has been so specific on timing.
The announcement suggests the world's biggest software company is nearing the end of its search for a new leader, which began in August when Steve Ballmer announced his plan to retire within 12 months.
Microsoft pledged to pick a successor within that timeframe, although most investors had expected the process to be finished by December or January.
"It's a complex job. I don't think it's surprising that it is taking some time to try to find the right person," said Kirk Materne, an analyst at Evercore Partners.
Microsoft shares were down 1.1 percent at $36.47 on Nasdaq.
"We're moving ahead well, and I expect we'll complete our work in the early part of 2014," Microsoft lead independent director John Thompson said in a blog post on the company's website.
Thompson is leading the four-man committee to find a new CEO, which includes co-founder and chairman Bill Gates.
Sources familiar with the search process have told Reuters that the committee is down to a "handful" of candidates, including Ford Motor Co CEO Alan Mulally, at least one external candidate from the technology industry and one or two internal candidates.
"We identified over 100 possible candidates, talked with several dozen and then focused our energy intensely on a group of about 20 individuals," said Thompson in the blog. "As this group has narrowed, we've done deeper research and investigation, including with the full board."
Intense speculation has surrounded Ford's Mulally as a leading candidate. He has not denied interest in the job, but has repeatedly said he enjoys working at Ford, where he is slated to remain through 2014.
Last week it was reported that Qualcomm Inc executive Steve Mollenkopf was a leading candidate for the job, but the chip maker forestalled that by making him CEO.
In choosing between Mulally, a candidate from the technology industry, and its own ranks of executives, Microsoft must make a decision on how much it desires large-scale management experience or deep technical knowledge in its CEO.
On Tuesday, Thompson's blog emphasized the tech-heavy requirements of the position: "This is a complex role to fill, involving a complex business model and the ability to lead a highly technical organization and work with top technical talent."
(Additional reporting by Poornima Gupta in San Francisco; Editing by Leslie Gevirtz, Bernard Orr)