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Does Ballmer Need To Go?
Pickens notes a TechCrunch analysis wondering — after Windows Vista and the failed Yahoo bid — whether Steve Ballmer's days at Microsoft are numbered. "Ballmer has been the big driver behind [the Yahoo] deal at Microsoft — some would say to the point of obsession. After the disaster that has been Windows Vista, Ballmer may have realized he needed to redeem himself in the eyes of Microsoft's board. And the 'transformative' deal with Yahoo was the way he was going to do it... If Microsoft's board loses patience with him, it might have to ask Bill Gates to temporarily come back as CEO until it finds a replacement. After all, Ballmer has already made a strong and convincing case for why Microsoft needs Yahoo to make its online and advertising strategy work. It's not clear whether Microsoft can achieve its objectives on its own or through other acquisitions. Maybe Ballmer thinks he can still do the deal by making Yahoo's stock price collapse and come back with a hostile offer."
TFA seems to assume that Balmer wanted to aquire Yahoo, and then did it entirely on his own initiative. That is certainly not the case. Even in a company as big as MS, the CEO does not go about spending that kind of money without the approval of major stockholders. He must have had the blessing of at least Bill Gates and Paul Allen, and probably others.
All of them knew going in that Yahoo had to voluntarily cooperate. So they know that Balmer is not to blame. So they are not going to dismiss him. They are going to go to plan B: the hostile takeover.
And what kind of person do you want leading a hostile takeover? You want the most vicious, gut-ripping, back-stabbing, ball-cutting executive you can find. They'll give him a raise.
all the conspiracy theories are too over the top. the business world is no where near this dramatic.
If you mod me down, I will become more powerful than you can imagine....
The yahoo board are more likely to be fired by the shareholders than Balmer.
For that matter Vista isn't really all that much of a failure in the long run, it gets a lot of bad press, but it's not a horrible OS, and even if financially it does turn into the next ME, the lessons they've learned will still be useful in the next OS.
Balmer has been with Microsoft for a long time, and given that everyone will think that the Microsoft CEO is a vicious, greedy, vindictive SOB even if they put a saint in the position, they may as well get the benefits of an actual vicious, greedy, vindictive SOB.
That Microsoft did not get Yahoo is not something that Ballmer or Microsoft will not be blamed for. He set a price and when it was not accepted tried various negoiations and when that failed he walked away. Smart business.
He now just has to show how Microsoft will build software to fit the roll Yahoo would, but he has this year or longer to do that.
Now if you are the CEO of Yahoo you better be about to deliever the golden goose.
I quite like to see MS going down the tubes.
Engineering is the art of compromise.
throw new NoSignatureException();
but i have to give it to him (or microsoft) this was a great move, now yahoos own disgruntled shareholders will do the dirty work for Microsoft
i mean the whole takeover thing was a win win for microsoft
they managed to seriously knock their competitor of-track withoutt spending a penny
"Ballmer has been the big driver behind [the Yahoo] deal at Microsoft -- some would say to the point of obsession."
Yet when the bid failed he seemed quite able to drop it. I wouldn't call that obsession, obsession would've been continuing the bid until they got Yahoo no matter how costly and damaging to Microsoft. He knew when to quit and he did.
Of course then the summary goes on to bitch at him FOR dropping it. Make up your mind, was it bad that he continued as far as he did to the point the summary feels he deserves to be called obsessive over it or not?
Most Yahoo and MSN are going south and Google is going north.
Its unfortunate. The last thing the world needs is a company with a monopoly on internet search, any company. And that includes google.
MSFT has been underperforming the exchange indices for as long as Ballmer's been in charge. Now that MSFT is not, and will never again be a growth stock, it should be a dividend stock. Every billion dollars that MSFT pisses away on failures like the zune or the Xbox, is shareholders' money being wasted on Ballmer's ego trips.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
http://finance.yahoo.com/q/bc?s=MSFT&t=my&l=on&z=m&q=l&c=
Here is the performance of the NASDAQ COMPUTER index since 2000:http://finance.yahoo.com/q/bc?s=%5EIXK&t=my&l=on&z=m&q=l&c=
Does that look familiar? (The "Interactive" option allows you to put MSFT on the same chart.)
Doesn't anyone remember the Dot-com bubble and all those new clueless investors overvaluing any tech company that looked somewhat successful? Note that MSFT's P/E ratio is currently at a somewhat sane 16.9.
[... pretty much everything that microsoft did for eight years which, for microsoft, was a bad move...]
Yeah, but how is this bad for anyone else but Microsoft Corp? I say keep Ballmer and watch everybody else grow!Do it yourself, because no one else will do it yourself. [beta blockade 10-17 Feb]
I agree that fundamentally monopolies are bad for consumers. In the case of Google, today, it's not a problem. Google isn't the default search engine in a clear majority of computers shipping today. That's quite telling. People have to seek Google out on purpose and chose to do so because Google works and works well. If you remember, Google rose to that position due to the arrogance of other search engines. Pay for top ranking, ads disguised as links in the ranks, eye candy over functionality. Then Google came along and said, why don't we try making a search engine first and generate revenue second. They are one of the few dot com companies that tried that and succeeded. Remember when ad words was first added and how "controversial" it was? It was ultimately accepted because Google MUST generate revenue somewhere in order to actually function.
In terms of online advertising, they may end up being a problem. All those ad words customers they generated ended up being very attractive to 3rd parties. Google will pay to put their customers ads up on your site, same basic market model as someone like doubleclick. It is here that a monopoly will end up costing consumers, given the proper board and CEO of Google. They have neither a monopoly there, nor the apparent corporate culture necessary to make this a problem. Yet.
This revenue is what Microsoft is interested in. In order to get there, Microsoft needs a functioning web site with an astronomical amount of users, to attract advertisers. Then they can take that customer base and start sharing it with 3rd parties, which attracts more customers. From what I understand, Yahoo has far better advertisement position than "Live" does. Combined with Yahoo, Microsoft would be in a position to make an advertisement company that could ultimately rival Google, doubleclick, etc. They failed because ultimately Yahoo's internal culture is against Microsoft. From what I can see, it's to the point that employees would have left the company in numbers significant enough that Yahoo would have ended up worthless. This is something the guys at MS didn't see happening. They assumed the amount of cash offered and the overall chance to rival Google in both search engine and advertisements would have been good enough for both management and employees. It clearly wasn't and now Microsoft understands that, which is why they recalled their bid and aren't chasing the hostile take over option.
Burn Hollywood Burn
Actually, the stock's performance is surprisingly GOOD.
The 1990s was the end of the era of PC adoption. I started work in the early 80's, which with the introduction of the microcomputer was the star of that era. Back in the late 80's and early 90's, we never bought computers onesies and twosies, we bought them literally by the truckload to computer-up entire departments at a time. It's been widely observed that while Microsoft was strongly against "software piracy" ideologically, it benefited from a certain level of "piracy" through economic network effects. Worrying about "piracy" was like worrying about the little fish that slipped through the holes in your net, whilst your net was completely full of big fish.
Microsoft was a company that was predicated on exponential growth in demand for its products. In the 80s through mid 90s it was driven by PC adoption, but the thoughtful among us always believed that was not sustainable. In the mid to late 90s the era of exponential adoption was extended for a few years by the dot com bubble.
Where are the exponential growth drivers of the twenty-first century? Well, there aren't any like the 80s-90s, but to the degree they exist they are in consumer markets. Microsoft had never been a consumer company. It never had consumer loyalty. It was a company that sold things to people who make purchase decisions on the behalf of others.
Microsoft's XBox and Zune efforts were, in the culture of Microsoft, bold and appropriate steps. Microsoft has for most of its existence been defined by dramatic, market beating growth. That is not in the cards in its PC software business. So it "had to" go where the growth was. They are strategic products. XBox is the more successful of the two, but arguably Zune is the more strategically important, because it is an attempt by Microsoft to leverage its PC monopoly into becoming a pinch point for digital entertainment providers.
It has a formula for digital entertainment, and it's the good old one that's worked so often for them before: appeal to people who make decisions on the behalf of consumers. In this case it's all about DRM. DRM isn't just an ideological choice, it's a strategic choice for Microsoft. What they offer is control of the platform. They offer some of that control to content oriented companies so those companies can extract more revenue from their customers. Consumers go with Microsoft because they can't get the content they want anywhere else. Like a many strategies, it's reasonable on paper, but real world considerations make it a lot harder than it sounds. Microsoft has to deal with a competitor with lots of vision for the future (Apple) and partners with no vision for the future other than to delay its coming as long as possible (the entertainment industry).
Without taking anything away from Bill Gates brilliance as a businessman, Ballmer had it a lot harder than Gates ever had. Bringing back Gates might improve discipline, or it might not. The company is inherently less focused than it was a decade ago.
What Microsoft really needs is new blood.
There are two choices: either it makes a serious bid to become a dominant player in consumer technology, or it becomes more conservative in how it throws money at grand strategies.
They're both reasonable options. I once heard an investment adviser say he had Procter and Gamble in his portfolio because if people stopped buying soap, most of his other assumptions about the world would probably be wrong as well. A company like P&G is continually creating new products, but nobody expects them to double their size every five years. You manage a company like that to produce profit, and growth is a welcome side effect. For years Microsoft ran things the opposite way: aim for growth and profits will come.
The right leader will take them one or the other path, although he'll face a lot of doubters, because neither of those choices is how Microsoft got where it is today. But bringing back Gates won't turn back the clock twenty years.
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He doesn't get how Google or Yahoo gets success. They get success because there are purely oriented to services they provide and how a bigger audience they can reach.
Yahoo can spend months trying to make Yahoo Mail beta compatible with one of the fastest moving browser targets on planet, Safari (and Webkit). Same goes for My Yahoo beta which can easily be called a full feature RSS reader APPLICATION running from web browser.
Google guys do everything to keep compatibility with Safari/Firefox and even as a user, I know Safari isn't the easiest browser to code for.
What does Hotmail do? It suggests user to "UPGRADE IE version" to get better experience. Problem? It is/was Safari 3.1 for God's sake.
If they want success on Web, they should fire the first person to suggest IE for better experience, adopt the "Graded browser support" scheme of Yahoo, stop advertising joke like things like Silverlight OR make Silverlight 2 something that people will show Adobe as an example. For example, Silverlight 64bit edition for Linux/FreeBSD , actual MS release without using any puppets.
As you mention Google Android, you know Android syntax is based on J2ME since it is the most known, distributed, multiplatform thing on mobile space. Did MSN code ANYTHING for hundreds of millions of mobile devices having J2ME? Symbian? No. Why? Because they see every device not running Win CE as some sort of "enemy".
On the other hand, Yahoo Go is a full feature application written in J2ME, Youtube (Google) ships an excellent performing J2ME application to mobile devices.
It is not only Ballmer to be fired. It is those idiots at MSN who once dared to block standard WAP browsers except their MS WAP browser (old Sony GSM) from mobile hotmail. As far as I can see, that group of idiots are still active at MS.
Not really no. MSFT doesn't have any profitable division except for windows and Office. no other diverse product is making enough money to support it self in the long term on it's own.
If MSFT keeps on buying up companies without making any real products the day windows or office becomes obsolete(IE ODF everywhere) is the day MSFT crashes hard. It will get torn to shreds by investors, leaving nothing left.
It will be spectacular.
MSFT can survive it if and only if they can get more than a handful of products that actually make money.
i thought once I was found, but it was only a dream.
I may be naive, but it would actually be nice to have a CEO which focused on more ethical tactics, and actually tried to create products that were compliant. I would much rather have a Microsoft that would support real open standards, instead of a dying Microsoft that will make everyone using MS products stuck at crappy binary blob formats.
- Headcount has increased from 35,000 to 80,000
Is that supposed to be a good thing? After all, you have to pay them. And looking it against your other figures, you get that, by more than doubling the people, you just double the revenue and not even double the income. So the income generated per person has in fact diminished.
Rome taught me patience and assiduous application to detail. Virtues which temper the boldness of great, general views.
.... is the day MSFT crashes hard. It will get torn to shreds by investors, leaving nothing left. It will be spectacular. Feel free to not conceal your glee if/when it happensThis kind of stories is what makes slashdot so funny for me.
You got all these anti-Microsoft zealots so eager to bash and say things about Ballmer and anything at Microsoft even when they do not have any idea of what they are talking about.
Meanwhile, Steve Ballmer played a very good hand, knowing that Jerry was bluffing. It is funny to read those comments showing the "proofs" of how Microsoft is doing so bad, how its stock is going down and how they are at the edge of a disastrous crisis.
If we talk about "reality distortion fields", a lot of guys (the majority?) of people frequently commenting on slashdot are really affected by the anti-Microsoft zealotry. They really should get out of their basements... they would be surprised.
As the article you point says, Ballmer played a really clever hand. At the end, Microsoft did know that the stockholders would very gladly accept their offer.
As it can be seen in the article pointed by parent post and other business related articles, Yahoo! major stockholders are not basement-nerds or bearded-Free software-zealots. They are the one of the most successful asset management firms who do not care about the religious wars but only about how much is the stock. And the reality is that the offer made by Microsoft was a good one.
Now, after Ballmer drop the offer, the reaction was a lowering of Yahoo!'s stock price. And, as it is said, ultimately it will result in a better bang for the buck for Microsoft.
If there is any CEO who may be thrown out, it is not Steve, but Jerry.
Ubuntu is an African word meaning 'I can't configure Debian'
Two splits in 5 years look good to me, and no big drops, I wish I had bought the stock back when it first leveled off. Nice feature that compare option under the interactive graph, it shows that microsoft is doing quite well.
A long, long, long, time.
Google sells stock and ads.
Microsoft has actual products (bitch all you want about them - they do sell).
And there is no way in hell Billy Boy would ever let Google (or anyone else for that matter) buy out his company.
Oh hell no... I say let him stay. A few more decisions like Vista, Zune and the DRM and Microsoft just becomes another Novell; the only two things they make that people really HAVE to have are Xbox and Exchange. Even Office is becoming optional now.
This is my sig. There are many like it but this one is mine.
But we knew that already. That's why we don't make good CEO's, and often not even good managers.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
They're in different industries. Microsoft is a software company. Apple is a fashion company.
Advice: on VPS providers
In the absense of such laws, the the EU has taken actions against MS that get no promise of interoperability from the rest of the industry. They have saddled MS with regulatory oversight, fines, and forced them to sell IP at rates below what their competitors would charge.
Why yes, monopolies have different legal restraints than other companies, and when said monopoly breaks the law, the penalty applies only to them.
In the long run this solves nothing -- it just makes it likely that in the future we'll face the exact same problem, but from some company other than MS.
No, not enforcing the law would make it more likely that in the future we'll face the exact same problem, either from MS or from another company, because they'd know there's no penalty for breaking the law. Enforcing the law means that the next company after MS will be more likely to think twice before illegally abusing its monopoly.
I get your point that the current laws and the EU's decision don't address the greater underlying issues in a way that fixes the problem entirely, rather than just in the specific case of MS. That's true, but means nothing as to whether the EU's action against MS was appropriate. You may as well say that because the law as it stands does not address the underlying problems of violent crime, we should not prosecute a particular case of aggravated assault. That's nonsense. If the problem is that the law is not over-arching enough, the solution is not to enforce the law less.
The enemies of Democracy are