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Nokia, Skype, Ford bosses in the running for top post.

Microsoft has narrowed down its search for a new CEO to four known candidates, according to a report from Reuters.

Former Skype CTO Tony Bates and Microsoft’s Satya Nadella are in the running, alongside Nokia’s Stephen Elop and Ford’s Alan Mulally.

Bates is now responsible for Microsoft’s business development and Nadella has been running the company’s cloud and enterprise business.

Elop is returning to Microsoft once the acquisition of Nokia is complete, and Ford’s Mulally is a strong candidate despite being committed to the motor company until 2014, according to the report.

Current CEO Steve Ballmer has said he will retire within the next 12 months. He is overseeing the search for a successor, which has apparently been whittled down from a list of 40 candidates.

Microsoft reported record first quarter sales last month of $18.53 billion, with profit of $5.24 billion.

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Alan Mulally in “serious” discussions to take over from Steve Ballmer.

Alan Mulally, the CEO of Ford Motor Company, has emerged as the front-runner to succeed Steve Ballmer at Microsoft.

According to a report on AllThingsD, which cites several “people with knowledge of the situation,” Mulally has warmed to the idea of taking over as CEO of Microsoft, despite his initial reluctance.

Mulally keeps a house in Microsoft’s home city of Seattle, which he bought during his time as CEO of Boeing. He has always intended to return to the city, and maintains strong ties to Microsoft – he advised Ballmer on the company’s recent internal restructuring.

Until recently, Nokia’s Stephen Elop, who joined Microsoft after the recent multi-billion dollar acquisition deal, was thought to be the most likely candidate to replace Ballmer. However, sources claim that “serious” discussions are now taking place with Mulally.

Another potential candidate is the Microsoft exec Tony Bates, who was CEO of Skype prior to its acquisition.

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