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Microsoft CEO welcomes 'post, post-PC era,' aims for 'something big'

In his first public interview since becoming CEO in February, Satya Nadella said he's not interested in dwelling on Microsoft's mistakes with smartphones and tablets.

Microsoft CEO Satya Nadella says the new Surface tablet is part of a "journey of improvement" at the world's largest software maker. Connie Guglielmo/CNET

RANCHO PALOS VERDES, Calif. -- Microsoft's Satya Nadella said he'd rather build "something big" than make a large acquisition, thinks the new 12-inch Surface Pro tablet could replace laptops in today's "post, post-PC era" and said he has no plans to spin out the Xbox gaming division or sell off the Bing search engine.

In his first public interview since taking over as CEO from Steve Ballmer in February, Nadella also said that while having founder Bill Gates on hand to offer advice has been "helpful," there's no confusion about who's in charge at the world's largest software maker.

"I'm the CEO," Nadella said Tuesday in the opening keynote at the Code Conference here Tuesday night. "I run the place."

Nadella stepped into the top job after Microsoft was criticized for failing to keep pace with competitors such as Apple and Google in key markets, including smartphones, tablets and search. In the past three months, he's been touting Microsoft's efforts to embrace " the mobile first, cloud world," and to offer its software and services on platforms beyond its Windows operating system. The decision to release a version of Microsoft's best-selling Office business apps for Apple's iPad tablet in April was about winning "usage," he told the audience of technology CEOs, insiders and influencers.

"The intent here is to make sure our services are available on all devices," Nadella said. "There are going to be Windows devices and there are going to be other devices, and we have to make sure our services run on all of them."

Among those new services will be a near real-time language translation technology designed to work with Microsoft's Skype video conferencing service, which boasts more than 300 million connected users. The Skype Translator will support multiple languages and be available as an app for Windows 8 users at first later this year before being released for other platforms.

Microsoft said it has been working on the speech recognition and translation technology behind the translator software for more than a decade. "It is early days for this technology, but the Star Trek vision for a Universal Translator isn't a galaxy away," Gurdeep Pall, vice president of Skype, wrote in a blog post after giving a demonstration showing how English-German translations to conference attendees.

Nadella, a 22-year Microsoft veteran, was also pressed to talk about the company's missteps during his tenure. "It's an interesting question. Should I bother about it or should I be more concerned about what we're doing now?"

New efforts include the Surface Pro 3 , which was unveiled this month and billed as a new category of tablets with its larger screen. It represents, Nadella said, a "journey of improvement" at Microsoft, which lags in the tablet market behind Apple's iPad and devices powered by Google's Android mobile operating system. He called the Surface "promising" and noted, to laughter, that "anything that is not a hit is promising. "

As for the company's $7.2 billion acquisition of phone maker Nokia, which was completed last month, Nadella declined to say whether he initially supported or opposed the deal. What he did say was that Microsoft recognizes the value of having a "complete" system of hardware, software and services and that it can't leave it up to the company's partners, or OEMs, to take on all the risk of developing hardware for its software and services.

When asked about whether Microsoft was interested in making a big acquisition, Nadella said, "we have to build something big."

That something big could include a new platform. Noting that Facebook CEO Mark Zuckerberg recently ponied up $2 billion to acquire the Oculus virtual reality headset, Nadella said, "All of us are on the hunt for the next big device platform." But he said, "There are a lot cheaper ways for me to get there without spending $2 billion."