"Ballmer must go", lead investor tells conference

http://dealbook.nytimes.com/2011/05/25/ballmer-must-go-einhorn-says/

by nikcub • 15 years ago

117 51 15 years ago

dealbook.nytimes.com

spencerfry• 15 years ago

As a big investor in $MSFT, I'm not saying I don't agree with Mr. Einhorn, but read the final paragraph:

"Mr. Einhorn’s calls at the Ira Sohn conference Conference a year ago, however, have not panned out, as Zero Hedge noted earlier on Wednesday. Going short Moody’s and McGraw-Hill, while going long African Barrick Gold, would have meant double-digit declines."

SlipperySlope• 15 years ago

What would be the upside if Ballmer quit? 10% pop? I wish a corporate raider would take on Microsoft with the intent of distributing the cash hoard to stockholders and divesting all the money-losing operations - could be a double!

potatolicious3• 15 years ago

> "What would be the upside if Ballmer quit?"

A CEO that knows WTF he's doing in the consumer space? Ballmer has proven that he handles the enterprise products just fine, but if MS wants any hope of hanging onto consumer products (consumer Windows, electronics, mobile, gaming, etc) I'd get rid of Ballmer and write J Allard a blank check to come back.

joshaidan2• 15 years ago

"his children were not allowed to use Google or iPods"

I find this to be the most interesting point the article makes. Perhaps the reason why Balmer has failed as CEO is because he does not use Google. Could your search engine of choice has any effect on the quality of your decisions?

thomasgerbe• 15 years ago

Perhaps he should focus on making products that convince his children to switch from Google/Apple products instead of banning them outright. They might be a good barometer.

Luyt• 15 years ago

This reminds me of the Broadway show producer who let his 10-year old kid watch new productions to gauge whether he should stage them or not. The idea was that the average audience has the same level of intellect as a 10-year old kid, and when the kid liked something, the general audience would too.

Related, but not the same, is the monkey which throws darts at a poster on the wall to decide which stock to buy. Who needs financial analysts?

joshaidan2• 15 years ago

That's a good observation. Why does he even need to ban Google/Apple products if the Microsoft ones are that good?

sorbus• 15 years ago

I doubt that there is any correlation between search engine and decision quality; the more logical (at least to me) conclusion from that sentence is that he is actively avoiding understanding competing products.

dschobel• 15 years ago

The title is slightly misleading, I thought this guy or his hedge fund owned a major piece of MSFT but the article makes no such mention.

nl3• 15 years ago

Hu?

Mr. Einhorn, a long-time Microsoft shareholder, said at the Ira Sohn Conference that the company had floundered under Mr. Ballmer’s stewardship, missing major opportunities in establishing tablet products to compete with Apple and wasting money on ill-conceived mergers and acquisitions.

Second paragraph. Emphasis added

tincholio• 15 years ago

It says he's a long time shareholder, but the title here on HN says "lead investor", which indeed makes it sound like he owns a big chunk of the whole thing.

nikcub2• 15 years ago

I think a mod edited the title because when I submitted it didn't say 'lead'

ikono2• 15 years ago

I can't stand Ballmer but I don't think he's going anywhere soon. Some quick math says that Ballmer and Gates own about a third of Microsoft combined. It'd be very hard to push either of them out against their combined will.

And while I'm sympathetic to the notion that anyone would be better than Ballmer, it really is hard to find a good CEO.

swombat2• 15 years ago

> Some quick math says that Ballmer and Gates own about a third of Microsoft combined.

Incorrect. They own about 6.7%. See http://news.ycombinator.com/item?id=2587008

jeroen• 15 years ago

Also incorrect. They own about 10.7%. See the comment on the comment you link to.

chubs• 15 years ago

Some questions:

* Who would you replace him with?

* How much money do they make from enterprise vs consumer stuff?

* If they make most of their cash from enterprise, is it reasonable to criticise him for missing the phone/tablet revolution? I mean, we don't criticise jobs for missing the enterprise software market.

Just some thoughts. Maybe they're simply drifting into becoming another IBM: all enterprise stuff, nothing interesting but certainly money to be made.

jonhohle• 15 years ago

It doesn't matter how much money they make, it's their potential for making more money in the future. It's not about their current business or where they are sliding.

The market hasn't seen that potential in Microsoft in 10 years, pretty much corresponding with when Ballmer took control.

MSFT: http://www.google.com//finance?chdnp=1&chdd=1&chds=1...

IBM: http://www.google.com//finance?chdnp=1&chdd=1&chds=1...

j_baker• 15 years ago

You're correct in saying that Jobs isn't criticized for missing enterprise software. He is criticized for trying to break into it and doing a terrible job of it though. Remember the XServe? Fortunately, he had the good sense to can that eventually.

Unfortunately, MS doesn't seem to be as introspective. I agree that it's best to see MS focus on their enterprise products. That requires them to... well... focus on their enterprise products rather than continuing their half-assed attempts to make consumer products.

cookiecaper• 15 years ago

Everything Microsoft does is about the domination of Windows and Office. These are their big moneymakers and they don't want to give them up. Are you sure that a royalty of $50 for practically every single PC manufactured in copyright-observing nations is worth less than their enterprise software? What about everyone that goes out and spends $100+ on a copy of Office? Those are some big markets and I'm not sure their value is so diminutive.

Additionally, such a platform allows tight integration of things like .NET, attracting developers to Windows' platform and allowing MS to sell dev tools and servers. Would .NET be worth less if Microsoft's desktop share were diminished? Almost definitely, imo.

Please don't underestimate the value of desktop dominance.

aneth• 15 years ago

Well, Jobs is not criticized for failing to break into enterprise software because he has had outrageously, unprecedentedly, massive success breaking into other markets. Failure is perfectly tolerable when you are good at something. Ballmer is an all around failure, and there are thousands of better candidates for his position.

Hagelin• 15 years ago

Paul Thurrott has a relevant blog post: http://www.winsupersite.com/article/commentary/microsoft-fix...

delinka• 15 years ago

This whole thread gave me an idea:

How about Microsoft focus exclusively on enterprise and enable all these consumer devices to work seamlessly with their enterprise software? I don't believe Ballmer can do that.

rbanffy• 15 years ago

It would be suicidal to focus on enterprise products. Their enterprise products only exist as continuations and tie-ins to their desktop products. Exchange exists to enable Outlook. Sharepoint exists to enable Office collaboration. Without control of the end-user environment, their advantage in the server space evaporates.

Who in his right mind would pick Exchange or Sharepoint alone?

hessenwolf• 15 years ago

Pfft - rather skewed definition of interesting there. Enterprise stuff is everything I get stuff done with, wheareas my phone/tablet is purely recreational.

jad• 15 years ago

> If they make most of their cash from enterprise, is it reasonable to criticise him for missing the phone/tablet revolution? I mean, we don't criticise jobs for missing the enterprise software market.

Apple is a very focused company that competes in a few select markets (rare for tech giants). Enterprise is not one of them. You can't criticize Steve Jobs for not succeeding in the enterprise market any more than you can criticize him for not succeeding in the search engine/online advertising market. Enterprise has never been a core part of their business.

Microsoft has been trying, and failing, for 10 years to create a market for their tablets. Another company created that market. It's been 18 months since the iPad was announced. Google, RIM, and HP all have operating systems appropriate to compete in the tablet market. Microsoft still has nothing.

Ballmer mocked the iPhone when it was introduced. Apparently he genuinely believed what he was saying, because instead of mocking the iPhone publicly but scrambling to bring Windows Mobile up to what would clearly be the new standard for smartphones, he let three years pass before Microsoft released a credible competitor. Meanwhile the smartphone industry exploded and as of now is dominated by other companies.

In these two crucial markets that are part of Microsoft's core business, Microsoft has been incompetent. At what point is it appropriate for the board to hold the leadership accountable?

kosei• 15 years ago

Ballmer has done nothing for shareholders, and that's ultimately his job, regardless of how much money they make. It's unconscionable that they've been able to pull in the kinds of profits they have, and still done nothing with their stock over the past 5 years.

ravivyas• 15 years ago

Although he has not brought a lot of growth to MS I do believe MS is at a point where a lot of growth can be achieved. MS's issue has been it has a lot of inertia with it and moves too slowly , but moves in the right direction. The Xbox , Kinect for Xbox 360 , IE 9 , Win 7 , WP7 & Azure have all been steps in the right direction.

xedarius2• 15 years ago

There's one man to lead this company, there always has been. Bill needs to stop curing the world and get back to pushing the boundaries of technology.

yardie• 15 years ago

Unless a billion buys immortality, Bill G is still mortal so whether he's six feet under or off curing the world doesn't change the fact that Microsoft, for the moment, is completely rudderless. If there is only one man to lead a company that means it is dead meat because tomorrow is not a guarantee and the investors know this. This is why Apple is working to codify what makes Apple, Apple.

xedarius2• 15 years ago

Agreed, entropy is inevitable, and a transition is required. However leaving Steve 'crazy' Ballmer in charge while you 'walk the earth' is a less than stella plan.

ct• 15 years ago

The leadership at MS needs serious re-work if they want to maintain their position in the enterprise. Their cash cow is Windows OS and based on what we've seen with their push for HTML5 at conferences like MIX over proprietary hooks into their OS like WPF and Silverlight will just eventually decimate their hold on the money making enterprise world.

Apple's enterprise hold last quarter grew 66%. This should scare Microsoft.

Our company has now pretty much set their sights on developing in HTML5 for internal line of business apps which used to be heavily desktop Windows based applications. This will eventually lead to less reliance on Windows and Microsoft, which is a good thing for the company but a terrible blow for Microsoft.

Apple seems to get it as to how to grow their business and keep the competitor from cannibalizing it. Apple has been downplaying HTML5 support in Safari/Webkit and almost purposefuly leaving things broken. This is a smart move on Apple's part in my opinion.

I've been mostly a loyal MS supporter but with the way things are going I'm strongly considering moving over from Windows to coding Apple apps and learning Objective C despite how nice C# coding is.

There's still time and hope to see if they change things around and announce something good at PDC in September, otherwise say goodbye to stagnant Microsoft.

"Ballmer must go", lead investor tells conference

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