Ford Motor chief executive officer (CEO) Alan Mulally has withdrawn from the race to take over the running of Microsoft, leaving the company’s board to refocus on internal candidates.

Reuters reports a source close to the company as saying no appointment is now likely to be made until the last week of January or in February, with Microsoft’s focus soon to change to the release of the company’s earnings on January 23.

Mulally has long been one of the favourites for the CEO role at Microsoft, but has now withdrawn from the running, telling the Associated Press he will remain in his current role at least for the rest of the year, though it is unclear whether this was his decision or Microsoft’s.

The software giant has been looking for a new CEO since Steve Ballmer announced his decision to quit after three decades in charge in August, with recent reports it was considering Qualcomm chief operating officer (COO) Steve Mollenkopf quashed by his appointment to the top job at the chipmaker.

Reuters’ sources said Microsoft was now considering a “handful” of candidates, including internal ones such as  Satya Nadella and Tony Bates, while former Nokia CEO Stephen Elop has also been touted as a frontrunner.

HumanIPO reported last month Microsoft lead independent director John Thompson, who is leading the four-man committee looking for a new CEO, had said he expected an appointment to be made early in the year.

“As the chair of the Board’s search committee, I’m pleased with our progress,” Thompson said. “The Board has taken the thoughtful approach that our shareholders, customers, partners and employees expect and deserve. After defining our criteria, we initially cast a wide net across a number of different industries and skill sets.”

He said the committee had identified over 100 possible candidates, had discussions with “several dozen”, and cut the field down to a shortlist of around 20 people.

“As you would expect, as this group has narrowed, we’ve done deeper research and investigation, including with the full Board,” he said. “We’re moving ahead well, and I expect we’ll complete our work in the early part of 2014.”