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UPDATE 1-Microsoft's Gates says 'pleased with progress' of CEO search

(Corrects to show answered questions, not asked them in third paragraph)

By Bill Rigby

BELLEVUE, Wash., Nov 19 (Reuters) - Microsoft Corp Chairman Bill Gates said on Tuesday he was pleased with the software company's progress in finding a new chief executive and that the search committee had spoken to a number of candidates, but did not give a date by which he expected a new leader to replace the retiring Steve Ballmer.

Speaking at Microsoft's annual shareholder meeting in Bellevue, Washington, Gates paused briefly and choked up with emotion as he thanked Ballmer for his work at the company.

Gates then left the stage and sat in the front row of an audience of around 400 people, alongside other members of the board. That was a departure from previous years when he remained onstage and occasionally answered questions.

Microsoft has not shed much light on its CEO search, but sources close to the process have told Reuters the company has narrowed its shortlist of candidates to just a handful.

Those sources have said the candidates include Ford Motor Co chief Alan Mulally and former Nokia CEO Stephen Elop, as well as former Skype CEO and internal candidate Tony Bates, now responsible for Microsoft's business development.

Microsoft remains highly profitable and last month beat Wall Street's quarterly profit and revenue forecasts.

But the company has come under criticism for missing some of the largest technology shifts in the past few years from Internet search to social networking, and Apple Inc and Google Inc are now at the vanguard of a mobile computing revolution that's eroding its core PC-based business. (Reporting by Bill Rigb; , editing by Gerald E. McCormick, Bernard Orr)