Microsoft Finds a High-Level Exec at Wal-Mart
The world’s biggest software company went shopping at the world’s biggest retailer for a new chief operating officer.
Microsoft Corp. said Thursday that it had hired Kevin Turner, who as president of Sam’s Club led a turnaround of the warehouse chain, a unit of Wal-Mart Stores Inc. Turner, who worked his way up from cashier, also served as Wal-Mart’s chief information officer.
The 40-year-old executive will fill a job that had been open for three years. His retailing experience with Wal-Mart could help Microsoft reach out to consumers with new products, rather than rely on relationships with computer manufacturing and corporate clients, analysts said.
“I’m not sure that Kevin Turner will be charged with coming up with the next growth strategy for Microsoft, but he’s been successful at that with Wal-Mart,” said James Ragan, an analyst with brokerage Crowell, Weedon & Co. in Los Angeles.
Bentonville, Ark.-based Wal-Mart is much bigger than Microsoft in terms of revenue, with sales of more than $280 billion last year, about seven times those of the software maker.
“For Wal-Mart to grow at [an annual rate of] 10% they need to grow revenue $25 billion, which is a challenge,” Ragan said. “But they’ve done close to that, and Sam’s Club has been a big part of that.”
Turner, who will start Sept. 8, will receive a salary of $570,000 with a signing bonus of $7 million, in addition to stock options based on performance, according to a copy of his job offer letter that Microsoft filed Thursday with the Securities and Exchange Commission.
His hiring reflects Microsoft’s efforts to extend into more consumer-oriented businesses, such as video games, online advertising and music downloading, as well as accounting and other software for small businesses, said analyst Mark Stahlman of Caris & Co. in New York.
“The fact that they brought in a consumer- and operational-oriented operations guy is a smart move,” Stahlman said.
Turner is the latest in a succession of high-profile outside hires by Redmond, Wash.-based Microsoft. In April, Ray Ozzie, creator of Lotus Notes, joined the company as a chief technical officer. Chris Liddell, who came on board in May as chief financial officer, held that same post with International Paper Co.
“It makes perfect sense that they strengthen their ranks because they’re going into their most critical year in five years ... with their biggest product lineup in a long time,” said Gene Munster, an analyst with Piper Jaffray & Co. in Minneapolis.
After two years of delays, Microsoft is scheduled to release a new version of its Windows PC operating system, called Vista, that will include Internet Explorer 7, an overhaul of its Web browser, late next year. In addition, the company is developing the next generation of its Office productivity suite for Windows, also expected next year.
“If they hit this right they could successfully get the company back on track,” Munster said. “If they fumble this it could take years, because it’s such a massive product lineup.”
Microsoft Chief Executive Steve Ballmer lauded Turner’s record of success and what he called his passion for technology.
“Kevin’s leadership of global technology, sales, marketing and services will help ensure we ... fully realize the growth opportunities before us,” Ballmer said in a statement.
