Microsoft is said to be working towards replacing existing CEO Steve Ballmer by the end of the year. Bloomberg News reports that the Microsoft board has been drawing up a list of candidates ahead of initial interviews, while planning to have the new CEO in place by the end of the year. The board is said to have already spoken with Ford CEO Alan Mulally, former Nokia CEO Stephen Elop, former Microsoft executive Paul Maritz, and Microsoft's business development and evangelism chief Tony Bates. While there's no clear and obvious choice, Microsoft also reportedly approached eBay CEO John Donahoe who declined to be considered for the role.

Sources familiar with Microsoft's Windows plans have revealed to The Verge that there's an urgency to replace Ballmer. While he has laid out a plan to reorganize Microsoft's various divisions around a central devices and services push, the Windows division is essentially on hold until the reorganization is fully in place. Without a new CEO to push the One Microsoft plan fully, there's a lot of uncertainty internally and speculation over Ballmer's replacement. We're told that a large number of Windows engineers have been reassigned to the Xbox One project to ensure the day one patch, an update that reverses key policy changes, is ready in time. Until Xbox One is fully shipped and a new CEO is in place, some of the key organizational changes around hardware and software have yet to be fully implemented.

Microsoft needs a new CEO before the Nokia deal closes

While former Nokia CEO Stephen Elop is under consideration as a Ballmer replacement, he's also scheduled to rejoin Microsoft to lead an "expanded Devices team" that covers Surface, Nokia's devices, Xbox, and other devices and studios work. We understand that the urgency in replacing Ballmer is linked to the Nokia devices acquisition which is expected to close in early 2014. The Nokia deal is a significant part of Ballmer's new strategy, and a new CEO would need to be in place before Nokia employees start moving across to ensure it's a smooth process that fits into the company's future plans. Bloomberg News notes that the timing of a CEO announcement will depend on negotiations with candidates over compensation and departure times from their current company or role. Either way, it's clear that Microsoft's search for a CEO is an urgent process that will likely complete sooner than Ballmer's planned retirement in 12 months.