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The Good and Bad of Satya Nadella As Microsoft's New CEO

By Erin Kennedy and Evan Niu, CFA - Feb 4, 2014 at 9:00PM

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Microsoft taps a longtime exec as its next CEO. Does Satya Nadella have what it takes?

It's official: Microsoft (MSFT -0.92%) has named Satya Nadella as its new CEO, ending its search for new leadership. A 22-year Microsoft veteran, Nadella has led the company's important cloud and enterprise segment to riches. That gives him crucial experience in managing Microsoft's most profitable business. Last quarter, the commercial segment drove nearly 2.5 times as much operating income as the devices and consumer segment.

On the flip side, some investors may be disappointed that Microsoft didn't tap an external candidate who may have pursued dramatic strategic shifts. There had been speculation that some candidates would have been interested in killing Bing or selling off the Xbox business to focus on Microsoft's core strengths. Additionally, Bill Gates will devote more time to Microsoft's strategic direction, which is a curse and a blessing at the same time.

In this segment of Tech Teardown, Erin Kennedy discusses Microsoft's new CEO with Evan Niu, CFA, our tech and telecom bureau chief.

Erin Kennedy will truly miss Steve Ballmer's antics. She has no position in any stocks mentioned. Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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