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."

yes - duh

And, the slowest moving company award goes to.......

yes - but

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

Re:yes - but

This time Ballmer would fly with his chair.

Re:yes - but

..through the Windows

Xbox Fiasco, Zune, Vista, Stock Price

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= [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.

Re:Xbox Fiasco, Zune, Vista, Stock Price

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= [yahoo.com]

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= [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.

Re:Xbox Fiasco, Zune, Vista, Stock Price

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

Ballmer took over in 2000...

Ballmer took over after (or around) the US DOJ ruling on MSFT. Under Ballmer, MS has been functioning under very heavy regulatory oversight, running scared from lawsuits (alcatel-lucent, the big antivirus vendors, adobe, google, just about everyone has sued or threatened to sue), been treated like an ATM machine by the EU, and much more.

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.

Re:Xbox Fiasco, Zune, Vista, Stock Price

Ah yes, the inevitable 'MS is doomed' straw man rebuttal...

It's not a straw man if I actually backed it up myself in the very same post. Read the part about their business model. I didn't go into detail because the discussion is about Ballmer, but I can if you wish.

See that peak? Thats when I left...

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:Xbox Fiasco, Zune, Vista, Stock Price

Although he sold quite a bit in 1998 to start his foundation...according to this
http://www.microsoft.com/msft/reports/proxy2007.mspx [microsoft.com]
he is still the largest individual stock holder at 9%.

Three words

YES...YES...YES...!!!!

Concerning the Yahoo deal

Microsoft dropped the Ballmer.

Raise time

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.

Re:He's Google obsessed

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.

The Yahoo bid didn't really fail as such

It was more Microsoft offered them quite a reasonable price for it($33 per share), the Yahoo board asked for substantially more($37 per share) refused to budge and Microsoft said forget it.

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.

Borg Icon

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

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

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.

Bill Gates' confidence, not the BoD

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

Re:Bill Gates' confidence, not the BoD

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

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

"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?

Don't need Yahoo for a reason to can him.

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

Re:Will save on M$ office furniture bill

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.

Re:Yes, but he won't

> He and Gates surely control enough stock to do as they please.

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.