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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."
The yahoo board are more likely to be fired by the shareholders than Balmer.
I don't think anyone is saying people at Yahoo are not going to face some heat either. They're just saying that the whole deal was really pushed by Balmer and since he couldn't make it happen, he may well pay.
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,
Doesn't matter how good it is if it continues to get horrible press.
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.
But there's the problem. He doesn't come off looking very vicious or greedy when he backs off at the first counteroffer. "Lame Duck" springs to mind.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
The SlashDot Borg Icon for Microsoft needs to be Ballmer not Gates.
In Microsoft there are two sets of crowds, the Gates set and the Ballmer set.
The Gates set is more apt to give stuff to users, do things the right way, and has been the underpinnings of things MS has gotten right or had done right by the IT world as a whole. They tend to take what they do seriously, have pride in Microsoft and want it to continue to succeed for the right reasons, etc.
The Ballmer group are the business minded, make a buck, and screw you type of people. They step on each other, screw over other projects if it gains them something, and could give a crap about the IT world or even Microsoft itself in the long run.
When you see the 4 versions of Vista, this was the result of the Ballmer crowd and OEMs wanting a dirt cheap version. The Gates crowd kept NT as two roles, Desktop and Server, but sadly the Ballmer nuts won that war cause they thought it would make MS an extra buck.
Gates = technology and empowering.
Ballmer = dominance and money.
Sadly Gates assumes that because most businesses think like Ballmer that Ballmer is doing the right thing, when Microsoft could be structured more like Gate's foundation and not only help the IT world more, but be just as profitable.
I would love to see Ballmer retire and the idiots that think like him go as well.
Bill Gates is still the Chairman, the largest shareholder and founder.
Stevie B is the second largest shareholder.
Between Billy G and Stevie B they hold over 10% of the company (a lot for a large cap company).
Surely the only way Steve gets rolled as CEO is if Bill loses all faith in him, and given their long relationship this seems unlikely.
I doubt very much that in the face of a hostile Bill the board has any hope of removing him even if they, and their institutional shareholders are unhappy with his performance.
It seems exceedingly unlikely that on the back of these problems they'd get rid of him. If it ever got remotely near that, he and Bill would have a word and he'd "retire to spend more time with his family".
--Q
whether some of these fiascos are Balmer's fault. Particularly, what happened with vista. It's very plausible that Vista died of feature bloat because Balmer didn't pay enough attention to it in the beginning; however, it's hard to tell from the outside who was really responsible.
Either way though, It's clear that some kind of shakeup needs to occur for Microsoft to continue to compete. I just don't see Microsoft being able to expand into new markets using the clumsy "throw money at the problem" approach that post-gates Microsoft has used. Money's an important tool for a company the size of Microsoft, but it can't cover up underlying problems, like a project that suffering feature creep, or a corporate culture that suppresses bottom up innovation.
Bill Gates seemed to run a much tighter ship overall, with a supposedly fairly "hands on" management style. However, it is true that Microsoft was a much smaller company under Gate's tenure, and I'm not sure he would be the man to put back in charge of the new Microsoft.
*sigh* No, no it didn't.
To be honest, the only reason I go to Slashdot anymore over programming.reddit & news.ycombinator is because the comments and moderation are better and I get a higher %age of stories relevant to my interests. But then I see this epitome of lazy editing...sigh.
Here's the link for your reference:
http://www.alleyinsider.com/2008/5/battered_yahoo_caves_admits_it_overplayed_hand_now_open_to_new_microsoft_talks
As the url would imply, Yahoo is caving. Ballmer is thus (much to my dismay) validated.
Your point about the stock price is still valid, but there is the dot com bubble burst that affected MSFT as much as everybody else that you need to factor in.
A more accurate assessment would be:
- Net income has gone up from 8 billion to 14 billion per year
- Headcount has increased from 35,000 to 80,000
- Revenue has increased from 25 billions dollars to 51 billion dollars per year
From what you read about MS on this site, you'd think it's demise is pretty imminent. The numbers tell a different tale, and they don't make Ballmer look too bad either.
The 'demise being imminent' part isn't too far fetched of course -- MS is under threat from all directions (linux, apple, google, adobe, sony, ibm, ...). But most importantly it isn't clear how much longer their current business model is viable. That's what the yahoo offer was about. Most companies would be in denial about it, if they were able to continuously generate the sort of numbers MS does. Upper management would be full of back-slapping, and big bonuses. MSFT is very aware of the problems facing them, and the credit needs to go to the top dog -- Ballmer.
I left at the peak. Not just luck of course. Also not just smelling the coffee. It was a feedback effect. By leaving, someone not quite as talented took my place. And soon more people decided it was time to leave. Of course, it didnt just happen to me, but I really do feel if I had stayed things could have been different. Its just that, well, too many parasites and glommed on and it just wasn't worth fighting them anymore.
While I think Ballmer is certainly responsible, the problems really started much earlier. I blame Melinda for taking the edge off Bill, seriouly, he was a changed man after he got married. Balmer picked up the slack and quite frankly, hes an overbearing personality with no technical knowledge.
One of my heroes, Chris Peters had said that in order to have a successful product, you must reduce all dependencies. After he left, Ballmer changed the strategy: he actually told everyone to increase their dependencies on other teams. I think he must have been influenced by some of those self-help gurus who talk about the stages of maturity (dependence,independence, inter-dependence) and misapplied the lessons. Whatever it was, working at MS became a real chore and jerks, megalomaniacs and scammers began get power and the BS built up.
I doubt MS can ever recover from this period, its stock will never rise significantly again.
Of course Ballmer is largely Gates fault and responsibility, without Ballmer's succesful manipulation of Gates, Ballmer would never have made to CEO of M$.
A big reason for Gates leaving M$ was the damage M$ was doing to Gates personal reputation and, strangely enough that damage was being caused by Ballmer abusive and arrogant behaviour as the CEO and his complete mishandling of M$.
M$ staff don't call Ballmer the 'billy' goat without due reason and a certain wry humour.
Chaos - everything, everywhere, everywhen
Now compare with AAPL. Notice a difference?
and honestly that is when all good companies start the drain spiral. The men with vision and drive for the company no longer in charge but bean counters.
when the bean counters are driving the ship they only look 30-90 feet in front of the bow. The refuse to adjust course for any reason unless they see it within that 30-90 foot window. It's not cost effective to steer around the iceberg that is on the horizon. It's more profitable to keep steaming at it full speed.
The WORST thing for a company is to go public and have most of the stock owned by someone other than the principals that started the place.
Do not look at laser with remaining good eye.
I think you are right that this is a power play. Call Yahoo's bluff and walk away. Now the share holders are left thinking I cold have had hard cash within 20% of my pipe dream about what this company is worth. Now I'm back to the pipedream. Which state do I prefer.
Before balmers intervention the pipdream valuation was rock solid. Every one thought it was realistic Someone someday would either pay that for yahoo or yahoo itself would generate income on that scale. If they did not they would not have invested in the first place. No one had to think about when that someday was coming or even if it was coming.
Now MS bid, and Yahoo desperately tried to find a white nite to counter offer.
No one else bid. Now MS withdrew theirs.
Sould searching time for yahoo investors. They are going to demand profits, not get them and in a year the company will run out of cash. The engineers MS covets will still be there, the company MS did not need will be cored out and bought for a song.
All that said. I don't think Monkey boy planned it that way at first given his string of high profile failures. But once the ball got rolling be probably realized the opportunity.
Some drink at the fountain of knowledge. Others just gargle.
That makes me wonder, is Microsoft's financial success/trouble follow the general tech-sector's success/trouble, or is the tech sector following Microsoft?