In the latest development in Microsoft’s search for a new CEO, Hans Vestberg, the chief executive of Ericsson (pictured), has been linked to the role, according to Bloomberg sources.

The news comes after Ford CEO Alan Mulally ruled himself out of the running to replace Steve Ballmer, who announced in August he planned to retire within 12 months.

Vestberg became Ericsson CEO in 2010, having previously been the infrastructure vendor’s CFO. He joined Ericsson in 1988 and has held management positions in China, Brazil, Mexico and the US.

One of the most significant developments overseen by Vestberg was the sale of Ericsson’s stake in the Sony Ericsson handset joint venture to Sony, completed in early 2012. This left Ericsson free to focus on its infrastructure and services businesses.

And Ericsson recently did business with Microsoft, acquiring the latter’s Mediaroom division — which makes software to deliver TV services via broadband networks — in September.

During Vestberg’s tenure, Ericsson’s shares have risen 19 per cent with revenue rising from SKR206 billion ($32 billion) in 2009 to an estimated SKR225 billion for 2013 (according to Bloomberg analyst estimates).

Ford’s Mulally was briefly labelled the favourite to take the Microsoft CEO role due to his corporate turnaround credentials (he saved the car company from a government bailout in 2009).

But with Microsoft’s interest believed to have faded due to Mulally’s age (64) and lack of technology experience, Mulally said he would stay with Ford for the next year at least.

Qualcomm’s next CEO, Steve Mollenkopf, was also connected to the Microsoft role before it was announced he would be succeeding Paul Jacobs at the chipmaker.

There are understood to be a number of other external candidates in the running to succeed Steve Ballmer, as well as former Nokia CEO Stephen Elop and the software giant’s cloud computing boss Satya Nadella. Tony Bates, formerly CEO of Skype and current Microsoft COO Kevin Turner have also been considered.

Microsoft, which is in the process of acquiring Nokia’s handset business, has been losing ground to Apple and Google in the mobile space, as Ballmer focused on devices such as the Surface tablet and Xbox gaming console, and offering software over the internet.

Following the launch of Windows Phone 8 in October 2012, Microsoft has still to prove its viability as a third ecosystem to seriously challenge Android and iOS, although there have been some (limited) positive signs.

In December, John Thompson, a member of Microsoft’s board of directors, wrote in a blog post that Microsoft will complete its work to find a new CEO in “the early part of 2014″.