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Bill Gates has already won his place as an American entrepreneurial legend, alongside the likes of Henry Ford and John D. Rockefeller. But what about Steve Ballmer?

Mr. Gates built Microsoft Corp. from a fledgling startup into a global technology powerhouse. But he has gradually moved away from the spotlight, handing over the reins of chief executive officer to Mr. Ballmer in January of 2000.

Today, the Gates era officially comes to a close as he retires from his day-to-day duties at the software giant to focus on his philanthropic efforts.

When the champagne toasts are over, when Mr. Ballmer walks into Microsoft's Redmond, Wash.-based offices on Monday morning, he alone will be standing at the helm of a company that is at a crossroads and having trouble finding which way to turn.

Its on-again, off-again takeover run at Yahoo Inc. has critics wondering whether Microsoft has what it takes to make a definitive-enough move to become a major player on the Internet.

Although the company has beefed up its online advertising sales business — most notably through its $6-billion (U.S.) purchase of aQuantive Inc. last year — it hasn't really turned heads with a bold move since it launched the Xbox and invested heavily in the exploding video game business.

Now, the continued uncertainty surrounding the Yahoo deal has some saying Mr. Ballmer's tenure as CEO could run shorter than the nine to 10 years he has promised.

"Microsoft probably needs a new template, a new plan, and Mr. Ballmer may or may not be the guy," Canaccord Adams analyst Peter Misek said. "He's certainly got the intellectual capability and the force of will, but sometimes it's important to have a fresh face in there."

Microsoft's core products are under fire and its software-licensing business model is being eroded by companies offering free software as a service. Windows Vista has been an overwhelming disappointment and Apple Inc. is gaining ground in the home computer market, while Microsoft's Office software is facing increased competition from open source alternatives such as Google Inc.'s Google Docs.

Mr. Ballmer's legacy will hang on whether the company chooses to become a stodgy IBM clone while resting on its core businesses laurels, or whether it decides to meet the challenges presented by nimble and dynamic competitors such as Apple and Google.

"Steve is a great leader," said Owen Sagness, vice-president of Microsoft Canada's online services group. "He gets people excited. He has been effectively running the organization for quite some time. I think the transition has gone very smoothly and I think people know Steve is in charge; there's no confusion."

But there is nothing quite like having Mr. Gates — the world's third-richest man and one of the greatest technology visionaries ever — sitting in on a product meeting, said Mary Jo Foley, author of the book Microsoft 2.0: How Microsoft Plans to Stay Relevant in the Post-Gates Era.

"He inspires a lot of fear and awe among the employees," she said. "You hear them talk about the 'Bill G' reviews with a lot of reverence in their voice. This is not just a figurehead leaving, this is someone who has been a mentor, an inspiration and a fear factor for the company."

Despite his boyish looks, Mr. Gates has developed a reputation over the years for being an imposing force in the boardroom. Employees have been known to prepare for weeks in advance of a meeting with the chairman, in the hopes of avoiding a slip-up that would incur his wrath. Never one to suffer fools, Mr. Gates was not above telling employees, or journalists, that an idea or question was the "stupidest thing" he had ever heard.

"Bill means everything to this company," Mr. Sagness said. "He's like a father figure, an inspiration. People love him. When we go to our kick-off events, Bill gets a standing ovation every time; there's a huge emotional connection there."

Mr. Ballmer has said he intends to keep running Microsoft for about another decade. However, if the company's online search and advertising businesses continue to flounder against Google and Yahoo, some analysts speculate the board could oust him in less than three years if Microsoft's stock continues to flatline.

Although the company's balance sheet, profit and revenue growth remain the envy of the industry, Microsoft's stock has risen only 10 per cent over the past five years. By comparison, shares of Google have grown 520 per cent since its 2004 initial public offering, while Apple's stock has shot up 1,700 per cent since 2003.

One of the biggest challenges facing Mr. Ballmer could be keeping Microsoft in one piece.

"There is increasing shareholder pressure to break it up to try and stimulate growth and innovation," Mr. Misek said.

Microsoft executives can generally be divided into two camps: "Steve's Guys," mostly sales-oriented folks, and "Bill's Guys," who tend to be more technology-minded.

"It's interesting that Mr. Ballmer is surrounding himself in his inner circle with all sales guys," Ms. Foley said. "I think that really shows there is going to be a shift in the balance of power within Microsoft.