Week in review: Changes at the helm

Steve Jobs takes a medical leave of absence from Apple, and Yahoo names a chief executive to replace Jerry Yang. Also: Taking tech's temperature.

Steven Musil Night Editor / News
Steven Musil is the night news editor at CNET News. He's been hooked on tech since learning BASIC in the late '70s. When not cleaning up after his daughter and son, Steven can be found pedaling around the San Francisco Bay Area. Before joining CNET in 2000, Steven spent 10 years at various Bay Area newspapers.
Expertise I have more than 30 years' experience in journalism in the heart of the Silicon Valley.
Steven Musil
6 min read

One tech pioneer welcomed a new chief executive this week, while another lost its leader--at least temporarily.

After months of insisting that Steve Jobs' health was a private matter with no impact on the company, Apple's chief executive announced that he will step down from his post while recuperating from a hormone imbalance. His absence will stretch until the end of June.

Tim Cook, Apple's chief operating officer, will run the company during Jobs' absence, according to an e-mail Jobs sent to Apple employees that was released to the media.

In an e-mail to employees, Jobs called the attention on his health "a distraction not only for me and my family, but everyone else at Apple as well."

To take himself "out of the limelight and focus on my health, and to allow everyone at Apple to focus on delivering extraordinary products, I have decided to take a medical leave of absence until the end of June," the CEO wrote.

Jobs, 53, has been the subject of heated speculation regarding his health since last June's Worldwide Developers Conference, when he appeared to have lost a great deal of weight. At the time, Apple insisted that Jobs' health was a private matter but revealed in early January that Jobs was suffering from a hormone imbalance that was impeding his body's ability to absorb certain proteins.

Apple shares plunged 10.8 percent a share in after-hours trading on the news.

Apple's responsibility to disclose the true state of its CEO's health has been discussed numerous times in the past several years. While there are no strict guidelines regarding disclosures, as they relate to executive health, any health issue that affects a CEO's ability to run the company can be considered "material," and therefore needs to be disclosed to the board of directors and the public.

New chief at Yahoo
Meanwhile, Yahoo named Carol Bartz, Autodesk's former executive chairman, to replace Jerry Yang as Yahoo's chief executive.

Bartz is a well-known, respected executive within Silicon Valley. She led the drafting and design software maker Autodesk for 14 years before announcing in early 2006 that she would step down as CEO, as part of a planned transition.

The big question for Bartz, though, is how well her experience nurturing growth at a computer-aided design software company will transfer to the job of turning around an embattled media company. Analysts scrutinizing the situation, though, are more bullish on Bartz than worried about her media chops. And Bartz could consummate the Microsoft deal that Yang and his allies rebuffed.

While Bartz has told employees that her first inclination is to hold onto Yahoo's search business, she said she needs to delve further into the subject. Bartz, who addressed employees during a companywide meeting Wednesday, reportedly indicated that she has already had an informal conversation with Microsoft CEO Steve Ballmer since accepting the Yahoo CEO post.

The company also announced that Yahoo President Sue Decker, who had been a candidate for the chief executive post, had resigned from the company.

Taking tech's temperature
IT spending worldwide is expected to slip 3 percent this year, with computer makers taking the brunt of the decline, according to a Forrester Research report. Global IT spending is predicted to drop to $1.66 trillion this year, marking the first time in seven years the industry has not grown.

Spending on computer equipment such as personal computers, servers, storage devices, and peripherals is expected to drop 4 percent this year, to $434 billion. The software sector, by contrast, is expected to suffer less, with spending anticipated to come in at $388 billion, roughly the same level as last year.

Meanwhile, after several years of seemingly tireless 15 percent quarterly growth, the PC industry hit a wall at the end of 2008. Overall PC shipments worldwide dropped 0.4 percent, to 77.3 million units, during the fourth quarter, according to IDC's Worldwide Quarterly PC Tracker study.

The results are more alarming for the embattled industry, considering that the quarter--the worst in several years--wasn't helped out more by the holiday shopping season. There hasn't been an overall drop in shipments since the second quarter of 2001, after the last recession.

Other indications of the tech industry's health come from big names in their respective sectors.

Search giant Google, having reduced its hiring rate, is also reducing its hiring staff. The company said on its corporate blog that it's cutting about 100 jobs.

"Given the state of the economy, we recognized that we needed fewer people focused on hiring," Laszlo Bock, Google's vice president of people operations, said in the blog post.

Handset maker Motorola plans to cut another 4,000 jobs, or about 6 percent of its workforce. The cuts announced on Wednesday are in addition to 3,000 job cuts Motorola announced in October, as part of a broader restructuring that also halted the launch of many upcoming phones.

For some weeks now, Microsoft has been considering whether it would need to cut a significant number of jobs, with some analysts predicting layoffs of anywhere from 10 percent to 17 percent of Microsoft's 95,000-employee workforce.

The software giant has cut jobs in a particular area or product group in the past, even in the hundreds of jobs, although it has never had companywide cuts in the scale currently being contemplated. Layoffs could be announced as early as next week, when the company is scheduled to deliver its earnings report.

On Capitol Hill
House Democrats revealed details of a massive legislative effort they said would inject new life into a flagging U.S. economy, thanks to a combination of $825 billion in tax cuts and new government spending. The 258-page draft bill includes $32 billion in electric-power upgrades, sometimes known as "smart grid" technology, $6 billion for expanded broadband Internet access, and $20 billion for health care information technology.

The House leadership has said it would like to hold a floor vote on the package by January 28 and send it to President-elect Barack Obama by mid-February. One potential obstacle is negotiations with the Senate, which is likely to have its own priorities.

And while it may seem as though Congress has completely forgotten about Net neutrality, a Democratic aide said it's likely to come back this year, along with potential alterations of digital copyright and patent law.

Aaron Cooper, who serves as counsel to Patrick Leahy (D-Vt.) in the Senate Judiciary Committee, said his boss is interested pursuing performance rights and Net neutrality legislation, a topic that could implicate copyright issues because of its relationship with file swapping.

With less than a week left before the Obama administration moves in, the Bush White House was ordered to turn over any devices that may contain e-mails from March 2003 to October 2005, a period from which millions of the executive office's e-mails appear to be missing. In an emergency court order, the Executive Office of the President was ordered to search staff workstations and personal storage table files, and to preserve any e-mails from the period in question.

The court order also directed the office's employees to surrender any media devices in their possession, such as CDs, DVDs, memory sticks, or external hard drives, that may contain e-mails from that period, so they can be searched.

Also of note
A secret federal appeals court has ruled that federal agencies can be authorized to conduct warrantless e-mail and telephone surveillance without violating the U.S. Constitution...Travelers from the United Kingdom, Germany, Japan, Australia, and a host of other countries now have to register online with the U.S. Department of Homeland Security before they can travel into the United States...The state of New York has canceled a $2.1 billion contract to build a wireless network for use by statewide emergency workers.