Silicon Graphics Chief Will Reportedly Move to Microsoft

Richard Belluzzo, who on Monday resigned as chairman and chief executive of Silicon Graphics Inc., is expected to join Microsoft Corp. to run its rapidly growing Internet activities.

Belluzzo is likely to take the position and is the best choice, even though he wasn’t Microsoft’s first choice, said Rob Enderle, analyst at Giga Information Group. Belluzzo is expected to start about Sept. 1, according to the Wall Street Journal, which cited people familiar with the matter. Belluzzo and Microsoft declined to comment.

Since November, Microsoft has been seeking a top executive who can build its Internet businesses, which are facing tough competition from America Online Inc. and Yahoo Inc. Belluzzo, 45, would bring a suitable business and technology background to Microsoft, Enderle said.

The hiring of Belluzzo is likely to postpone Microsoft’s issuing a tracking stock to more fully reflect its Internet activities, which revolve around the MSN network of Web sites, Enderle said.

On Tuesday, SGI shares fell $1.56 to close at $10.88 on the New York Stock Exchange; Microsoft shares rose $5.75 to close at $92.19 on Nasdaq.