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."

Comments

yes - but

[Cryacin]

The fastest moving chair in a company award goes to...

Re:yes - but

[phagstrom]

..through the Windows

Re:yes - but

[aldm]

He's chair man, isn't he?

Xbox Fiasco, Zune, Vista, Stock Price

[Anonymous Coward]

Ballmer took over in 2000. Here is Microsoft's stock performance since 2000:

http://finance.yahoo.com/q/bc?s=MSFT&t=my&l=on&z=m&q=l&c=

Ballmer is responsible for:

* The 7+ billion dollar Xbox fiasco

* The Zune marketplace flop

* The PR disaster that Vista has become

* Mass exodus of Microsoft employees to Google and other exciting and growing companies

* A total failure to get anywhere with Search and Advertising

Ballmer has been a complete failure in every single effort by Microsoft to create viable products outside of their core OS/office software/server software products.

Re:Xbox Fiasco, Zune, Vista, Stock Price

[Anonymous Coward]

Ballmer took over in 2000. Here is Microsoft's stock performance since 2000:

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.

Re:Xbox Fiasco, Zune, Vista, Stock Price

[mrbluze]

Ballmer is responsible for:

[... 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!

Re:Xbox Fiasco, Zune, Vista, Stock Price

[hey!]

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.

Re:Xbox Fiasco, Zune, Vista, Stock Price

[ozmanjusri]

I agree.

The open source community should support Ballmer. He's been our best evangelist for almost a decade.

Re:Xbox Fiasco, Zune, Vista, Stock Price

[Anonymous Coward]

Now compare with AAPL. Notice a difference? Yes. With a current P/E ratio of 38.1, we may look back at this period as the "Apple Bubble."

Re:Xbox Fiasco, Zune, Vista, Stock Price

[HardcoreWizard]

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.

Re:Xbox Fiasco, Zune, Vista, Stock Price

[dhavleak]

MSFT doesn't have any profitable division except for windows and Office. SQL server, active directory, exchange, visual studio, share point, biztalk, windows mobile, MSN, live search to name a few. Even the xbox dudes have been making profits -- they're just a while away from recovering the initial investment. And the zune team isn't doing too badly either. Ultimately all these businesses are growing and need people. The acquisitions (danger, aquantive, viridian, bungie, ensemble and many more) add to the head count as well. (bungie is an independant studio again, but you get the point). These are real products with real customers. They're just not as visible as office and windows. There's also the research division which is also growing and the live mesh team etc.

.... 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 happens :P

MSFT can survive it if and only if they can get more than a handful of products that actually make money. As you see from the list above, they understand this pretty well. Well enough to make an offer to buy Yahoo because they're not satisfied with the progress they're making there (and rightly so). And that brings us back to Ballmer -- he's got the gumption to admit that MS hasn't got the right online strategy/brands/customer-base/mindshare, and that they need some help in this area. It takes guts to do something like this -- something along the lines of Google buying youtube when they already had a competing but much less successful solution (google video).

Re:Will save on M$ office furniture bill

[smilindog2000]

I doubt it, but you never know how Wall Street will react. I've become more convinced lately that individuals like Bill Gates and Steve Jobs, and that guy who built Sony, are critical for stellar growth in high-tech companies. After David Packard left, HP floundered for years. I suppose Gates could revive Microsoft, much like David revived HP for a time, and Jobs has revived Apple.

However, it seems to me that the writing is on the wall: cheaper computer hardware means cheaper software. $200 PCs are a bad sign for Microsoft. Android built on Linux for cell phones is a bad sign for Windows Mobile. Losses in Xbox and other non-core divisions don't help, and defocus Microsoft from it's primary mission: Windows. I'm a big fan of Intel's Atom processor, and I suspect Intel can make the transition to cheaper computing, although with lower revenue. Microsoft... I'm not so sure.

Borg Icon

[TheNetAvenger]

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.

Vista

[Toreo asesino]

After the disaster that has been Windows Vista Vista is the 2nd most used OS in the world for desktop PCs and laptops; I wonder how you would quantify it being a disaster (the fact you might dislike it not counting of course). You could claim it's not the most popular Windows to have come out, but disaster it is not. Money talks, bullshit walks, as they say.

Re:Vista

[Aranykai]

Lets see some numbers to back up those claims eh smarty pants?

Anyways, Vista may be "the 2nd most used OS in the world for desktop PC's", but how bout we compare its lifespan to ANY other OS release. I would still be using Windows 2000 if there werent a few select applications(mainly games) that I cant trick into running on it. I know there are several others out there who are the same.

People buy into the bullshit marketing. Its not that the product has merit, its that they are foolish enough to believe the promises made. How many millions of people buy those weight loss supplements, or male enhancement supplements? Because there are lots of people using something doesn't mean its a quality product.

Re:Vista

[webplay]

Sorry, but he is correct. Here are the Google Analytics stats from a top 200 U.S.-based general interest website from yesterday (May 5):
Operating System contribution to total:
1. Windows 91.86%
2. Macintosh 7.12%
3. Linux 0.69%
4. iPhone 0.13%

Versions of Windows:
1. XP 80.44%
2. Vista 14.65%
3. 2000 3.31%
4. Server 2003 0.80%
5. 98 0.68%

I hate Microsoft as much as the next guy but...

[Xest]

"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?

Re:Bill Gates' confidence, not the BoD

[Anonymous Coward]

Steve Jobs had a lot more than 10% when he was dismissed from Apple.

See that peak? Thats when I left...

[Anonymous Coward]

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.

Re:He's Google obsessed

[Ilgaz]

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.

Re:Concerning the Yahoo deal

[xtracto]

This 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.

So if he's going he will need a new job

[infonography]

Running mate for McCain? following in the Dick Cheney tradition of dark lord of the underworld?

Take over for Castro in Cuba?

Still time for a new manager of the Olympic Games in China. (or compete in the 500m chair toss.)