REDMOND, Wash.—Steve Ballmer paced his corner office on a foggy January morning here, listening through loudspeakers to his directors' voices on a call that would set in motion the end of his 13-year reign as Microsoft Corp.'s chief executive.

Microsoft lagged behind Apple Inc. and Google Inc. in important consumer markets, despite its formidable software revenue. Mr. Ballmer tried to spell out his plan to remake Microsoft, but a director cut him off, telling him he was moving too slowly.

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