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Does Ballmer Need To Go?
Posted by
kdawson
on Tue May 06, 2008 01:56 AM
from the strike-two-and-the-crowd-goes-wild dept.
from the strike-two-and-the-crowd-goes-wild dept.
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."
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yes - duh (Score:5, Funny)
yes - but (Score:5, Funny)
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Re:yes - but (Score:5, Funny)
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Re:yes - but (Score:5, Funny)
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So if he's going he will need a new job (Score:5, Funny)
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.)
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Re:yes - but (Score:5, Funny)
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Xbox Fiasco, Zune, Vista, Stock Price (Score:5, Informative)
http://finance.yahoo.com/q/bc?s=MSFT&t=my&l=on&z=m&q=l&c= [yahoo.com]
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.
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Re:Xbox Fiasco, Zune, Vista, Stock Price (Score:5, Insightful)
http://finance.yahoo.com/q/bc?s=MSFT&t=my&l=on&z=m&q=l&c= [yahoo.com]
http://finance.yahoo.com/q/bc?s=%5EIXK&t=my&l=on&z=m&q=l&c= [yahoo.com]
Does that look familiar? (The "Interactive" option allows you to put MSFT on the same chart.)
Doesn't anyone remember the Dot-com bubble [wikipedia.org] 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.
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Re:Xbox Fiasco, Zune, Vista, Stock Price (Score:5, Interesting)
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Re:Xbox Fiasco, Zune, Vista, Stock Price (Score:5, Insightful)
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Re:Xbox Fiasco, Zune, Vista, Stock Price (Score:5, Interesting)
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Re:Xbox Fiasco, Zune, Vista, Stock Price (Score:5, Insightful)
[... 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!Parent
Re:Xbox Fiasco, Zune, Vista, Stock Price (Score:5, Funny)
The open source community should support Ballmer. He's been our best evangelist for almost a decade.
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Re:Xbox Fiasco, Zune, Vista, Stock Price (Score:5, Insightful)
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Re:Xbox Fiasco, Zune, Vista, Stock Price (Score:5, Interesting)
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.
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Re:Xbox Fiasco, Zune, Vista, Stock Price (Score:5, Insightful)
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Re:Xbox Fiasco, Zune, Vista, Stock Price (Score:5, Insightful)
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See that peak? Thats when I left... (Score:5, Interesting)
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.
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Re:Xbox Fiasco, Zune, Vista, Stock Price (Score:5, Insightful)
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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Re:Xbox Fiasco, Zune, Vista, Stock Price (Score:5, Informative)
http://www.microsoft.com/msft/reports/proxy2007.mspx [microsoft.com]
he is still the largest individual stock holder at 9%.
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Re:Xbox Fiasco, Zune, Vista, Stock Price (Score:5, Interesting)
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.
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Re:why? (Score:5, Insightful)
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Three words (Score:5, Funny)
No no no! (Score:4, Insightful)
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Concerning the Yahoo deal (Score:5, Funny)
Re:Concerning the Yahoo deal (Score:4, Interesting)
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 [alleyinsider.com]
As the url would imply, Yahoo is caving. Ballmer is thus (much to my dismay) validated.
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Re:Concerning the Yahoo deal (Score:5, Insightful)
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.
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Raise time (Score:5, Insightful)
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.
Re:He's Google obsessed (Score:5, Insightful)
Its unfortunate. The last thing the world needs is a company with a monopoly on internet search, any company. And that includes google.
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Re:He's Google obsessed (Score:5, Insightful)
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.
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Re:He's Google obsessed (Score:5, Insightful)
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.
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over stating things a bit (Score:4, Insightful)
The Yahoo bid didn't really fail as such (Score:5, Insightful)
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.
Oh Yahoo gets punished too (Score:4, Interesting)
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.
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Yahoo will not factor in. (Score:4, Insightful)
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.
Re:Yahoo will not factor in. (Score:4, Insightful)
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Borg Icon (Score:5, Interesting)
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 (Score:5, Insightful)
Re:Vista (Score:5, Insightful)
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.
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Re:Vista (Score:5, Informative)
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%
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Bill Gates' confidence, not the BoD (Score:5, Interesting)
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
"Chair"man? (Score:4, Funny)
If you think Bill Gates is the "chair"man, you must be new here...
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Re:Bill Gates' confidence, not the BoD (Score:5, Informative)
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I hate Microsoft as much as the next guy but... (Score:5, Insightful)
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?
It's hard to tell (Score:4, Interesting)
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.
Don't need Yahoo for a reason to can him. (Score:5, Insightful)
-jcr
Re:Will save on M$ office furniture bill (Score:5, Informative)
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.
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Re:Yes, but he won't (Score:5, Informative)
Not true: Check the holdings:
http://finance.yahoo.com/q/ks?s=MSFT [yahoo.com]
% Held by Insiders1: 13.42%
% Held by Institutions1:62.70%
If the institutions (banks, mutual funds, hedge funds, etc) want Steve out the door, he's gone.
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Re:Yes, but he won't (Score:5, Interesting)
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.
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Re:Bidding for Yahoo was a tactic to cause chaos (Score:4, Informative)
Banks, pensions and mutual funds, why?
-jcr
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