SGI's Belluzzo expected to go to MSN

People familiar with the matter said that Mr Belluzzo, 45 years old, will join Microsoft's highest circle of executives, managing interactive operations that include its Microsoft Network service. The software company has been searching since last November for a new leader for the Internet businesses, which are at the front of an increasingly fierce battle with America Online.

Mr Belluzzo couldn't be reached for comment. A spokeswoman for Microsoft declined to comment.

The departure is a blow for SGI, a long-struggling computer maker that recruited Mr Belluzzo 19 months ago to lead a turnaround effort. The Mountain View, Calif., company said it was surprised by his decision to take what it described as a "non-CEO" position at another company; it didn't identify that company but said it doesn't compete with SGI.

SGI named board member Robert Bishop, a former SGI executive, to succeed Mr Belluzzo.

SGI has been struggling to find a winning formula since it fell from Silicon Valley's fast track several years ago. The company pioneered the market for high-performance desktop computers and servers that generate realistic graphics for use in engineering and movie special effects, including the dinosaurs in "Jurassic Park."

Microsoft, hoping to bolster its standing among Web companies, looked outside the company for an executive with broad media experience. It also unsuccessfully tried to interest Brad Silverberg, a former Microsoft vice president who has been on leave since 1997. The Internet operations are now being jointly run by two executives, Jon DeVaan and Brad Chase.

Mr Belluzzo is expected to start at Microsoft around 1 September, and hold a title of executive vice president, one person familiar with the situation said. Though he has mainly focused on computer hardware, he had long-time connections to Microsoft while at HP.

One connection is through Richard Hackborn, a retired HP executive who recently agreed to become its chairman. Mr Hackborn, widely considered one of Mr Belluzzo's mentors, sits on Microsoft's board of directors. Mr Hackborn declined comment.

"Rick is very personable and very straightforward," said Robert Frankenberg, a former HP executive who is now chief executive officer of Encanto Networks ''He's a very good leader.''