Why Steve Ballmer will resign from Microsoft in 2010

http://thenextweb.com/2009/10/06/steve-ballmer/

by mgcreed • 17 years ago

17 32 17 years ago

kakooljay2• 17 years ago

Ballmer's not exactly a visionary:

In a post from June [http://thenextweb.com/2009/06/02/web-death-google] Boris relates a famous story about a meeting between Yahoo and Microsoft which took place when Yahoo was still a small start-up:

"Yahoo was growing at neck-breaking speed and David Filo and Jerry Yang were invited to Redmond to talk about working together.

"The meeting turned into a disappointment when Steve Ballmer joined the conversation and gave his opinion on the future of search engines. According to Ballmer Search Engines were a temporary solution to a temporary problem. Ballmer claimed that 'within a few years there will only be a handful of websites left. People will use their Favorites to navigate to those destination sites and nobody will need a Search engine except for a few students and professors.'"

Oops.

nearestneighbor2• 17 years ago

If someone like that could be the CEO of Microsoft, anyone can!

wmeredith• 17 years ago

The critical thing about a job as a decision maker (a CEO) is not to never be wrong, it's to usually be right. If someone were to cherry pick a bad decision from my past, I'm sure they could find a doozy.

trafficlight2• 17 years ago

Amazing. He really missed the entire point of the internet.

axod• 17 years ago

That pretty much defines Microsoft.

vorador2• 17 years ago

Well, I think this is becoming more and more right. I mean, how many people only use Facebook, Youtube and Wikipedia only ?

The internet, after an incredible growth phase, has just begun to shrink.

hapless• 17 years ago

Microsoft's value has been falling because it is obvious that software commoditization threatens their revenues. Windows and Office isn't packed with growth potential. No amount of "vision" or "leadership" will defy fate.

Many products launched during Ballmer's tenure have been successful. More importantly, Microsoft has been able to move away from their core business.

* Sharepoint (A billion dollar product and a multi-billion dollar industry.)

* Axapta (purchased)

* Great Plains (purchased)

* Solomon (purchased)

* Xbox/Xbox 360

* BizTalk

* .NET (An application stack to compete with J2EE, unthinkable in 1999.)

----

During the same period, a number of Microsoft products went from minor items to major contenders in their industries.

* MS SQL was a Sybase clone in 1999; in 2009 it's a price/performance champ.

* Exchange was only used in "Microsoft shops" in 1999. Today it's the de facto standard.

protomyth4• 17 years ago

Is the the Xbox 360 profitable by itself, or are they still using the Mac BU to cover the losses?

btilly2• 17 years ago

The Xbox 360 never had to make profit to be successful. The reason the product was introduced is that Microsoft saw itself going head to head with Sony in a number of markets, and so they wanted to undercut Sony's big cash cow, the playstation.

As long as Microsoft reduced Sony's profits more than Microsoft lost money, the mission was accomplished.

edw5192• 17 years ago

2 ways to have $1 billion:

1. Start with a game changing idea in a rapidly evolving market. Assemble a great team. Execute flawlessly. Take advantage of every opportunity. Minimize mistakes. Get a little lucky.

2. Be Steve Ballmer and start out with $2 billion.

crystalis• 17 years ago

Have you even tried to contribute to the discussion?

RyanMcGreal2• 17 years ago

Sometimes a negative object lesson is helpful.

edw5192• 17 years ago

The owners of Microsoft have lost half their equity under Ballmer's stewardship. If his #1 responsibility isn't to preserve and grow the owners' equity, I don't know what is. (Think about it, if you had sold all your Microsoft stock when Ballmer took over and put it in the bank, you'd have twice as much money now.)

I think my little analogy was a pretty illustrative contribution. Why don't you?

elblanco• 17 years ago

I thought it was funny.

wglb• 17 years ago

Or, "the easiest way to make a small fortune is to start with a large one"?

tspiteri• 17 years ago

Dismissing the tripling of Microsoft's net income just because PC sales almost tripled as well seems a bit, for want of a better word, simplistic.

codexon• 17 years ago

Well its not too far off the mark since Windows is preinstalled on about 90% of pcs.

bpyne• 17 years ago

It sounds like Yahoo was still in its infancy. Just to play Devil's Advocate, could Ballmer have talked down the role of search engines to get the Jerry et al. to concede Yahoo or its technology at a cheaper price?

jakarta• 17 years ago

If Microsoft were smart, they'd use the free cash flow that they throw off to outright buy businesses in areas outside of tech that are run by really bright people. Imagine Microsoft going conglomerate. With the right capital allocation they could be an awesome company.

Unfortunately, they probably lack such visionary ideas and will end up throwing good money after bad while their FCF gradually declines as they're made irrelevant. A slow and sad death.

Look at Henry Singleton as a bright leader of a tech company who allocated capital well enough to grow shareholder value by expanding into non-tech areas like insurance.

protomyth4• 17 years ago

General Electric 2.0 -- the market may not like that

protomyth4• 17 years ago

My biggest problem with Ballmer is that he seems defined by what he hates as opposed to what he loves.

Also, his tendency to enter markets for no other reason then to have a product in every market is painful. The Zune is a great example. What the heck did it bring to Microsoft?

Dilpil• 17 years ago

Comparisons of stock prices circa 1999 to stock prices 2009 are pretty ridiculous.

SamAtt• 17 years ago

This is a situation where numbers can mislead. Microsoft may very well be down 53% since Ballmer took over in January 2000 but do they mention that the Nasdaq, a tech industry bell weather, is down 50% overall for that same time period?

(ref: http://finance.yahoo.com/q/hp?s=%5EIXIC&a=00&b=1&...)

brg• 17 years ago

My personal reasons why he will resign or be forced out:

He has significantly underperformed compared to the market.

Stephen Sinofsky has shown how valuable he is to the company during the Win7 reorg, and will be elevated to CEO by popular demand.

Why Steve Ballmer will resign from Microsoft in 2010

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