Influential hedge fund manager calls for Steve Ballmer to quit

By Tom Warren, on 26th May 11 7:43 am with 67 Comments

Microsoft CEO Steve Ballmer

A top hedge fund manager has called on Microsoft’s Steve Ballmer to step down.

David Einhorn, President of Greenlight Capital, blames Microsoft CEO Steve Ballmer for the company’s stock price. Speaking candidly during the annual Ira Sohn Investment Research Conference in New York on Wednesday, Einhorn said it was time for Ballmer to step aside and “give someone else a chance,” after being in charge for over 10 years. “His continued presence is the biggest overhang on Microsoft’s stock,” he added.

Microsoft shares rose by 0.87% in after-hours trading on Wednesday following Einhorn’s remarks. Einhorn’s hedge fund owns around 9 million shares in Microsoft, 0.11% of the company’s outstanding shares reports Reuters.

Speculation that Ballmer would step down spiked in November after he sold 49.3 million shares, at a price of between $26 and $28 each. The Microsoft chief still owns around 359 million Microsoft shares, or 4.2% of the company, worth $9.6 billion in total. Steve Ballmer, one of the richest people in the world, took over as Chief Executive Officer (CEO) of Microsoft in January 2000. The detroit born Harvard student joined Microsoft in June, 1980. Ballmer was Microsoft’s 30th employee and was initially offered a salary of $50,000. Ballmer is the 33rd richest person in the world according Forbes, with an estimated wealth of $14.5 billion.

  • GP007

    Hedge fund manager only look at the stock price and nothing else.   Ballmer gets too much flack for no real reason, since taking over things have changed for the better imo.  Bings doing well, the 360 is doing really well, Win7, Office 2010 are best sellers.  WP7, someone had to bite the bullet and drop that mess that was WM6.x.     I don’t get what else the market wants?  MS keeps making money and gaining quarter after quarter, so realy, what more?  Ballmer leaving isn’t going to change MS’s stance on things anyways.

    • Fearofnations

      Don’t forget C# and .net.  That stuff is pretty sweet.

    • http://www.microsoftaddict.com Paul Paliath

      Hedge funds don’t just look at the technicals of a stock; I’m pretty sure most also do fundamental analysis of companies. I presume that these guys definitely keep tabs on what’s going on with Microsoft seeing the volume of shares they own in them.

    • http://www.microsoftaddict.com Paul Paliath

      Hedge funds don’t just look at the technicals of a stock; I’m pretty sure most also do fundamental analysis of companies. I presume that these guys definitely keep tabs on what’s going on with Microsoft seeing the volume of shares they own in them.

    • Anonymous

      It may have less to do with the performance of the company and more to do with the confidence of shareholders in Ballmer.  I think Microsoft has made a great deal of headway while Ballmer has been in charge, but I can also see the argument that a fresh face would inspire confidence in this ‘new’ Microsoft we’re seeing.  

      Ballmer could remain on the board and influence the company’s direction just as Gates does.

      Not saying I’m for or against Ballmer stepping down– or aside.  Just offering another perspective.

    • Tom

      Let me put it this way.

      Jim Allchin originally came to Microsoft to build an object file system into Windows 95, which shipped without one.  Then he tried to build another object file system, which failed.  And finally, he tried to build an object file system into what became Vista.  Needless to say, it failed.  He resigned.

      Ray Ozzie came to Microsoft to put everything on “the cloud.”  He brought with him Yet Another re-implementation of Lotus Notes, complete with byzantine UI and bizarre error messages (I guess he wanted to replicate it bug-for-bug).  He was all gung-ho about Live Labs, which turned up a bunch of cool prototypes but nothing that made money.  He resigned.

      J. Allard won himself kudos for developing Xbox, promising to outsell Playstation 2 within three years.  Three years later, Playstation 2 was the most popular console ever made, beating the *combined* sales of Xbox and Gamecube.  He managed to waste almost ten billion dollars of shareholder money doing it.  And then when the *next* generation came along …  Yeah.  He resigned.

      Mich Matthews was at Microsoft for 22 years.  During that time, Microsoft called its customers dinosaurs (Office), paid Seinfeld a bunch of money for weird ads that nobody understood, and made Zune a laughingstock of the industry.  (When Marc Benioff wants to insult Microsoft, he refers to Microsoft Dynamics CRM as “Zune CRM.”)  She resigned.

      We’re so close to getting a “new Microsoft” that I can practically taste it.  Microsoft could have a clean slate and a fresh start.  Just one more person needs to resign.

    • Anonymous

      The reason we have a lot of great products is because there are a lot of brilliant minds inside Microsoft. But Ballmer is the reason so many are unsucessful. The buck stops with him. Ballmer sat on his ass while Apple came in a dominated smart phones. If you remember, Microsoft was one of the pioneers of smart phones. For them to sit on their butt while Apple released the iPhone is shameful. Ballmer and Sinofsky are the reason WP7 is not on tablets. Nobody ever said you couldn’t put Windows 8 on a tablet. But that’s a long ways off. Microsoft could have had WP7 on tablets when it launched. Instead, they sit here and still have nothing to offer in the tablet market.

      Zune is another failure of Microsoft. It’s a great product, far better than any other music service in my opinion. But when have you ever seen Zune marketed? I can’t ever recall seeing a Zune commercial. Not only that, but Zune is completely useless in most of the world because Microsoft didn’t see to it that it many of it’s services were available in other countries. The same can be said of many of Bing’s  and WP7 services.

      This brings me to another problem at Microsoft. Their USA only mentality is sickening. Why would anyone outside the U.S. use Bing? They’ve done little to improve that product for a worldwide market. Does Ballmer really think when Apple releases a new iTunes or a new software product, that they’re going to release it only in the U.S.? No, Apple makes sure their products are not only marketed to a worldwide audience, but they also make sure it works and is functional throughout much of the world.

      Microsoft has a ton of great products. But leadership has completely failed them.

    • Mark

      Well said and accurate. Einhorn is right, Ballmer has to go.  

    • Tom

      In 2007, there was a famous interview in which Bill Gates and Steve Jobs sat on stage together with Walt Mossberg. Bill Gates talked about how computing would involve a variety of form factors: phones, tablets, and PCs. Steve Jobs talked about how the PC would still be the hub of people’s computing experiences.

      Fast forward to 2011. The irony could not be more complete.

  • http://pulse.yahoo.com/_3OIDXOI5OEMTX6Z3O5YUBFSISA Diego3336

    I agree Ballmer made some mistakes, but I think the things like the agreements with Novell, Nokia, Yahoo and RIM, the Windows 7, Office, Bing and Xbox success and the Skype coming under MS umbrella are way better than any bad news coming from Redmond these times. These hedge fund managers are too blind with this new bubble known as AAPL, that’s the problem.

    • Justthefacts

      How is Apple a bubble? Their revenue is larger than MS’s now. Their profit is larger than MS’s. Their growth is >4X MS’s. And relative to growth, they’re trading at a discount to MS. Doesn’t sound like a bubble to me.

    • http://pulse.yahoo.com/_3OIDXOI5OEMTX6Z3O5YUBFSISA Diego3336

      Do you remember the Motorola V3? Apple is basically doing the same thing. Let’s see what the future gonna show us…

    • Justthefacts

      Apple has reinvented their *entire* business *three* times in the last decade. As one market has matured, they’ve managed to tap into another larger and even faster growing one. Today, iPhone drives more than 60% of their revenue and profit after just four year on the market. iPad is already a >$10B business and has the potential to take over the heavy lifting if, as you suggest, iPhone growth starts to wane.

      MS has been tryng to do the same thing for that entire period and has spent several orders of magnitude more on R&D and acquisitions. The result? Not a single business that rivals even S&T for profit.  

      History isn’t always the best indicator of future performance. But with nothing else to go on but track record, who would you bet on?

    • http://pulse.yahoo.com/_3OIDXOI5OEMTX6Z3O5YUBFSISA Diego3336

      I would not bet in a company which depends heavily on a single person who could die soon, and this is not history, it’s just a fact well known.

    • G4dualie

      What, like any CEO couldn’t drop dead tomorrow? You’re reaching… Besides, with all the advance notice, I have no doubt whatsoever, Apple’s BOD has a succession plan in place. Unlike Microsoft who is just now beginning to weigh the possibility of a Microsoft without Steve Ballmer.

      Also consider the wave of executives who have left under Steve Ballmer’s leadership. Ozzi, Allard, Bach, et. al., are some of the brightest minds in the business and we all know that there will be a few more who will leave before Steve Ballmer does.

      The brain drain of all that corporate knowledge is inexcusable. It’s not just failed products and lost opportunity, it’s about fighting a war of attrition and having to fill the vacuum while flying the morale flag at half-staff resulting from their departure.

      Think of the these executives’ teams and their teams and so on… and tell me their departure didn’t create a tremendous hinderance on Microsoft, coupled with the fact that Steve Ballmer absorbed their responsibilities because there was no one to which he could delegate.

    • Tom

      Ozzie and Allard were the most overrated tech “leaders” that Microsoft ever hired.  Now that they’re gone, Microsoft just needs one more person to leave before it can reinvent itself.

    • http://twitter.com/oolong2 oolong2

      I agree, Microsoft has always been best when it comes to partnering.  That is what Balmer is good at and this is how the marketplace gets dominated, this is how windows dominated in the first place.   Apple can only go so far working in a silo.  The fact that Android grew so fast  is perfect example of that.

      People blaime Balmer for not pushing WP7 on a tablet, yet  in the same breath complain that Microsoft is just copying what the other guys are doing.   Everyone is making content consumption devices which is growing the entire market, however no one is making content creating devices to replace our current PCs.

      The fact is Windows 8 on ARM will be a HUGE deal.  It will change the market in ways that people cannot imagine because all they can think about right now are phones and tablets.

      I think two years from now people will look at the lay of the land and realize that although Microsoft came late to the game they made the right choices where it really matters.

  • http://pulse.yahoo.com/_3OIDXOI5OEMTX6Z3O5YUBFSISA Diego3336

    I agree Ballmer made some mistakes, but I think the things like the agreements with Novell, Nokia, Yahoo and RIM, the Windows 7, Office, Bing and Xbox success and the Skype coming under MS umbrella are way better than any bad news coming from Redmond these times. These hedge fund managers are too blind with this new bubble known as AAPL, that’s the problem.

  • zzz

    I think there are pretty valid reasons for both for and against keeping Ballmer as CEO.  But this fund manager lost all credibility on me when he critized Ballmer, calling him “stuck in the past”, for not allowing Google or ipods on his children. The guy just doesn’t get it.  Google and Apple are trying to destroy Ballmer’s company and legacy. Why should Ballmer support them by buying/using their products in his family? That’s crazy. It’s not like Microsoft doesn’t have competitive alternatives in Bing and Zune. If your dad runs a business, you are supposed to support him and his business. That’s family trust and bond. You don’t go around supporting your dad’s competitors. I’m sure that’s the value Ballmer explained to this children when he “banned” those, not some ego based authoritarianism. In fact, it would look silly and have made worse headlines if kids were seen favoring competitors products.

    • http://www.winrumors.com Tom W

       Yeah agreed. I think Microsoft needs someone like Sinofsky to really take control and push things forward.

    • Anonymous

      what Sinofsky would bring new to MS as a whole? Perhaps only stock image. Maybe is more important on their valuest product, Windows.

    • Anonymous

      what Sinofsky would bring new to MS as a whole? Perhaps only stock image. Maybe is more important on their valuest product, Windows.

    • zzz

      Yeah he seems to have a very good set of background/track records/traits. Don’t know if he would want the job though. MSFT CEO is much more than a technical position, you know.

      Regarding Ballmer, it feels like a bit of awkward time for MS to make a CEO change IMO. If WP7 catches on in the coming year or two as many think, it could do wonders for the whole company, desktop and tablet OS, Bing, Office, everything. Then Ballmer will have silenced all his critics.

      On the other hand, there is definitely some negative effect his image has on consumer’s perception of MS although I think much of it is undeserved — people stereotyping Ballmer based on his appearance, misunderstanding his remarks (e.g. my comment above), etc. Whether deserving or not, I could see some consumers warming up to MS a bit more if a fresh face replaces him.

      When asked, Ballmer has said he will resign when he thinks MS will be better off with another CEO. That’s the right take IMO. Although it’s clear he did make some mistakes (Vista and smartphone mainly) in the past, I think they have been doing better job lately and it’s not obvious to me if there’s a clearly better MSFT CEO candidate than him *at this particular point in time*. I’m guessing that’s also how Ballmer and the board feels.

    • http://pulse.yahoo.com/_3OIDXOI5OEMTX6Z3O5YUBFSISA Diego3336

      IMO this fact of the stock prices being the same for the past 10 years is kinda a victory when I consider everything MS was unable to do because of the antitrust process.

      I think it is fair to give Ballmer at least one more year from now. Let’s see what he gonna do without the DOJ’s watchdogs.

    • zzz

      Yeah I think it’s probably best for MS to see how it goes until the end of 2012. We should have a much better picture of WP7 and W8 by then and it should be pretty clear if Ballmer did well or not. Right now, there are two big events (WP7 and W8) playing out and I don’t see how a new CEO will necessarily help their outcome.

    • Paul

      That seems to miss an essential fact: MS should never have fallen behind in mobile or tablets to begin with. It was a pioneer in both.

      But Ballmer failed to understand the threat posed by either iPhone or iPad. He even ridiculed the chances of both in the media. As a result, the company wasted at least a year in denial when it should have been plotting the fastest way to respond. The consequences have been severe; Apple became a dominant force in mobile and sailed past MS on revenue, profit, and market cap; Android was able to enter givne MS’s slow response and accomplish what MS never did: become the leading OS in mobile. And HP bought Palm and is now committed to WebOS on mobile and PCs, an eventual threat to Windows from MS’s largest OEM.

    • zzz

      First of all, people are making too much out of Ballmer’s famous remarks on iphone. What was he supposed to do? Praise it and comfirm that it’s next big thing? C’mon, when you are CEO, you don’t praise competitor’s product publicly, period.

      Yes, like I said, Ballmer missed couple of things. But is he supposed to have perfect batting average? MS still earns a lot of money and their strength in enterprise has grown under his watch and is unmatched, you know. And there are signs their consumer side is making a comeback with W7 and WP7 (and hopefully W8). So again, what good would it do to change CEO right now?  I don’t see much benefit. In fact, it may hurt MS a little by adding more uncertainty — people will think he’s getting fired because WP7 and W8 are in chaos, which I think is not true at all at least for WP7.

    • Paul

      His batting average wouldn’t get him a berth in the minors. What he should have done with iPhone is a) keep his yap shut instead of predicting its failure and b) immediately bought Palm and licensed WebOS, thereby shaving off three years from MS’s response. Anything they’ve done with WP7 could have been done on top of WebOS. The side benefit is it wouldn’t have fallen into HP’s hands. He should also have acted immediately on tablets by allowing WP7 to be loaded. Again he waited. Again Android filled the void and now MS finds itself behind both Apple and Google. Virtually every OEM is now promoting Android for tablets and committed to contunuing to do so even post W8. Michael Dell just predicted that Android will lead the category in three years. And virtually every OEM is shipping or contemplating Android for PCs, except for HP who is going WebOS. How can anybody defend Ballmer after that?

      The biggest thing a change of CEO would do is offer up the possibility of avoiding another decade of decline, irrelevance, and high profile high stakes failures like those above. We’ve seen what Ballmer can do. It’s nothing to be proud of. Someone new might do worse, but given the poor record they’re likely to do much better.

    • zzz

      Ballmer’s famous comment on iphone was given in response to an interviewer’s question. He did correctly say that iphone was overpriced for mass market — Apple had to reduce the price pretty fast.

      Tablet game is still to be played out. Android tablets are not selling well. There are many smart people still not convinced of the size of tablet market. I too believe there has been some overhype of tablet surge due to ipad’s rapid adoption by Apple fans (and then some normal people). I also think ipad was given too much credit for PC sales slowdown – W7 had a terrific year and a half and it was bound to show some decceleration anyway.  Sure, tablet is not going away but I think if MS comes out with a solid offering in the coming year, I think they will do more than just fine.

    • DavidE

      Look at the ten-year chart, and you look at the five-year chart, and it’s crazy. They pay a dividend, but over the last five years, Microsoft is basically flat, and IBM pays out a comparable dividend and they’re up over 100%.  

    • Tom

      Basically, the stock market is pricing Microsoft as though it will disappear in 10 years.

      Meanwhile, the bond market is pricing Microsoft bonds *higher* than Chinese government bonds (higher price = lower interest rate).  In other words, the bond market thinks that the Chinese government will collapse before Microsoft does.

    • WarrenB

      @TOM No that is not the conclusion, it not collapse that affects the Chinese market valuation,  It is based on currency valuation fluctuations (artificially high currency) and the amount of US holding.   If you do not know what your talking about it is best not to.

    • Graystar

      @e01725ba5e9ba8e599384d18b6e24ab2:disqus  Another uninformed fan boy statement “ also think ipad was given too much credit for PC sales slowdown – W7 had a terrific year and a half” do you get pained for these ignorant post?
      See: http://www.businessinsider.com/chart-of-the-day-consumer-pc-growth-2011-5

    • Paul

      His batting average wouldn’t get him a berth in the minors. What he should have done with iPhone is a) keep his yap shut instead of predicting its failure and b) immediately bought Palm and licensed WebOS, thereby shaving off three years from MS’s response. Anything they’ve done with WP7 could have been done on top of WebOS. The side benefit is it wouldn’t have fallen into HP’s hands. He should also have acted immediately on tablets by allowing WP7 to be loaded. Again he waited. Again Android filled the void and now MS finds itself behind both Apple and Google. Virtually every OEM is now promoting Android for tablets and committed to contunuing to do so even post W8. Michael Dell just predicted that Android will lead the category in three years. And virtually every OEM is shipping or contemplating Android for PCs, except for HP who is going WebOS. How can anybody defend Ballmer after that?

      The biggest thing a change of CEO would do is offer up the possibility of avoiding another decade of decline, irrelevance, and high profile high stakes failures like those above. We’ve seen what Ballmer can do. It’s nothing to be proud of. Someone new might do worse, but given the poor record they’re likely to do much better.

    • GrayStar

      You even say he has missed a couple of things”  A track record like that should not be acceptable because those few things are MAJOR.

      Even if WP7 does not completely crap out, how many $$$$$$$ will be used to keep it from being a complete failure all at the expense of stockholder value.  WP7 is a good OS that is 3 years late, why reward old leadership and let him save face when better management could have kept these losses from happening?  

    • http://thounsell.co.uk/ Thomas Hounsell

      The only problem is they still has to tread carefully, especially in markets where their share might constitute a monopoly, because I bet the EU are still eager to make an example of Microsoft. I hope that doesn’t phase them too much though, because if there’s one thing MS does really well, it’s integration. They have a presence in so many markets, it’s rare that they have to go outside, and even when they do, it’s to companies they own a share of, like Facebook for Social Networking, and that enables them to move everything in the same direction – which has been their biggest downfall while they’ve had to keep everything relatively independent to please the courts.

    • CSSystems

      PLEASE!!!!!!!!!! EU was to blame for not creating a legitimate tablet even though it had a iPad killer with the “Courier”, or not creating WP7 three years earlier, putting out VIsta, or coming so late with ZUNE, etc, etc, etc.   

    • Paul

      Vista, ceding a ten year head start in mobile and then turning around and doing the same thing in tablets. Both times dissing iPhone and iPad’s chances and then looking like an idiot. Missing search and then having to enter late. Missing the cloud and then having to enter late. The $50B Yahoo bid. Spending $6B on aQuantive. Paying $8.5B for Skype, a company that has never made money in its history. Losing $8-10B on search so far and $2B a year. Still $6B of losses for Xbox, even after a year or two of profitability. Danger. Kin. Taking MS from $0 debt to $12B.

      The guy is a disaster.

    • HeatherL

      @Paul, thank you for saying quantitatively, what MS fanboys like zzz fail to understand the vast failure of this company resulting in opportunity loss from Ballmer’s reactionary leadership, creating a reactionary business.   He spent too many years milking the cash cow of Office and Windows at the expense of real innovation that depression stockholder value.  

    • HeatherL

      @Paul, thank you for saying quantitatively, what MS fanboys like zzz fail to understand the vast failure of this company resulting in opportunity loss from Ballmer’s reactionary leadership, creating a reactionary business.   He spent too many years milking the cash cow of Office and Windows at the expense of real innovation that depression stockholder value.  

    • Tom

      I agree with everything you say, except the debt.

      Debt is worrisome if it comes from operating results, or if it is used to leverage up operating earnings.  Microsoft’s debt, however, is purely a treasury cash-management tactic to take advantage of the current bond bubble created by Quantitative Easing II.  Microsoft has debt, but it has no *net* debt and a giant pile of cash.

      It actually costs Microsoft to issue AAA-rated 5-year bonds than to pay the dividends on the stock it is buying back using the debt.  Due to the tax benefit of debt, the US government is actually *paying* Microsoft 0.7% a year to keep its euros overseas and avoid paying US taxes on it.  How insane is this?!

      Passing up free money because of some allergic reaction to the word “debt” would be a blunder to add to the multiple blunders you’ve listed.  Google just announced a debt offering, as well.

    • Anonymous

      Sinofsky is one of the problems with Microsoft. He’s the idiot that absolutely vetoed any idea of putting WP7 on tablets, and WP7 absolutely should have been put on tablets, at least until W8 gets here. The in-fighting and hierarchical BS inside Microsoft is a major problem. Groups fighting with one another and killing great ideas because they feel one amazing product treads on their territory. That’s what happened with the Courier. Microsoft needs a CEO with some guts, who make a risky move based on sound reasoning.

    • Tom

      Sinofsky had no hand in Windows Phone 7.  How’s that working out?
      Apple makes more money off the iPhone than the iPad — and will for some time to come.  If Windows Phone 7 is a success, Sinofsky will not be able to stop you from porting it to a media tablet.  Walk before you run.

    • Brent

      MS needs a CEO who is a strategic genius. A person
      who can outthink and out plot Google and Apple instead of constantly being
      surprised by them and forced to adapt and respond. That person needs to be
      aggressive, with strong technical ability, great vision, and an ability to
      correctly anticipate the future and get ahead of it. Somebody who once and for all can grab the separate parts of MS by the balls and get them all
      pointing in one direction. They need to consolidate all marketing and let
      nothing exit the company unless it’s of consistent high quality that reinforces
      the brand even as it highlights a particular segment (no more shitty “to the
      cloud ads” or embarrassing windows ones while Xbox puts out the occasional
      winner). Sinofsky has demonstrated some of those competencies and he may have
      others. But overall I don’t think he’s the right person. Bring back Paul
      Maritz. He has demonstrated almost all of them, both at MS previously and more
      recently at VMware.  

  • Anonymous

    I have mixed feelings because I think the Microsoft’s divisions are at the top of their game as almost everything seems to be a best-of-breed application right. They also have record revenue and huge profit
    but paradoxically this all despite the one huge Microsoft lack and that is marketing–surely it is the worst, most lame marketing in the history of the corporate world.

    If Xbox had been named the Microsoft Gaming Console or something it would have been discontinued because of poor sales about 9 years ago. The Microsoft brand is literally mud when it comes to consumers. Luckily for them it is mitigated by the fact they produce such great technology and that the corporate world doesn’t care so much about their lame image.

    So I can’t overlook the fact that Ballmer let the marketing go on so badly for so long and I also cannot overlook the very stupid decision of them naming a consumer device Windows Phone 7–that would be fine if they were only going after the corporate market but it is a huge burden to put a consumer device that is already up against such formidable hurdles getting out of the blocks. If Ballmer doesn’t get that then he should go.

    • Anonymous

      I agree.  Ballmer is too stubborn on tying everything new and good to the MS/Win brand, even though these brands generate very little excitement in a time where consumer excitement is a huge driver in the success of new products.  Loosen up the brand!  WP7 has a great future and its UI is itself a kind of new and exciting visual brand, but the [Win + version number model] brand is doing it no favors.  Similarly, Win 8 and the 18 sliced-and-diced flavors it will probably come in will succeed DESPITE being as enticing to consumers as a wet blanket.

      No one could expect MS to beat Apple at marketing or innovation over the past decade, but there have been major failures to even stay in the same ballpark.  Zune stands out as one that should have held its own but was completely outflanked by consumer perception.  However, its reincarnation in WP7 is impressive (more so with Mango’s release).  MS’s better nuts-and-bolts user experience is about to seem Apple seem just a little less “magical” to consumers, and that (if it happens) is big news.

    • G4Dualie

      “No one could expect MS to beat Apple at marketing or innovation over the past decade…”

      See, I don’t buy that, not for a moment. Microsoft should have been in lock-step with Apple. As has been stated enough already, Microsoft was pioneering products long before Apple introduced them. So what went wrong? Apple out-marketed Microsoft?

      The failure has been Steve Ballmer deciding he knows what’s best for the consumer, instead of just asking them what they want. Steve Ballmer took control of Microsoft at a time when the living room was fast becoming the arena of consumer sales. They were looking to expand their business in entertainment after locking up the corporate market.

      How many times did Microsoft fail to deliver on promises of consumer-related products? For the last twelve years Microsoft has beed disappointing millions of consumers. In fact, I believe the consumer market became a huge distraction and hindered Microsoft’s ability to focus on the crown jewels; Windows.

      The mindset of Microsoft was not entertainment-centric, it was hardcore IT. So Microsoft took a page out of Sears playbook and came out with a strategy for the “Softer side of Microsoft”; forsaking the desktop for the couch.

      Twelve years trying to make the transition from a stoic, hard-case corporate enabler to a liberal, fun and games  creator has been the real source of tension and frustration for this company.

      Microsoft is struggling with an identity complex!

    • Tom

      Microsoft does not need to be better than Apple in marketing to do well.

      Microsoft merely needs to move from having the absolute worst marketing in the tech world, to having the second-worse advertising in the tech world.  That alone would be worth billions.

  • Anonymous

    Its cyclical. Currently MS isn’t the stock market darlings that google and apple are. A lot of that is hype. But when you look at what MS has and its ability to make a LOT of money quater after quarter. Its hard to turn a cheek to them. They have a pretty successfuly piple line in many different markets (more so than their competitors). I feel like Google is where MS was years ago under Gates. The lets get into everything as fast as possible. Or throw crap against the wall and see what sticks philosophy. That’s not good long term for comsumers…because we get tired of the never ending updates (on hardware) or dropping of products. Now it seems MS is (finally) taking the time to make their products link together to be something cohesive. You can see that in their consumer and business line. Windows phone 7 is a perfect example. Long term its the right position to be. Consumers will come around to that.

    • http://pulse.yahoo.com/_3OIDXOI5OEMTX6Z3O5YUBFSISA Diego3336

      You’re right. What I think MS needs more than anything is a huge marketing work to change its public and media perception. It’s easy to imagine how far the Google or Apple stocks goes if one of these companies made an agreement with Facebook or bought Skype. But with MS nothing happens, mostly because the media is biased against MS and the general public follows all the BS the media spread and one way or another, this reflects on the stock prices.

    • Anonymous

      true there seems to still be a lot of hard feelings from the tech crowd over “longhorn/Vista” debacle. Even MS fans like Paul Thurott always seem to harp back on it. It will take time for that silliness to go away. MS does need to step up their marketing. It wouldn’t hurt to take a few swings at the competitors. Especially, with Windows phone 7. They mentioned a few times at the mango update referring to their competitors UI’s as a “sea of apps”. That should be the cornerstone to the mango marketing. 

    • http://pulse.yahoo.com/_3OIDXOI5OEMTX6Z3O5YUBFSISA Diego3336

      MS needs to be “cool”, maybe doing like Red Bull sponsoring every kind of “radical” sports. They did a good job with the Xbox brand, I don’t know why they doesn’t even try to do the same with the Microsoft brand itself.

    • G4dualie

      Forget gimmicks! Microsoft needs to redefine “cool”. For too long, they have been sitting on their hands, trying to figure out what it is their competitors are doing. In other words, Microsoft is allowing its competitors to define the market.

      Steve Ballmer is the sales guy! What does he know about innovation? Sure he’s good at math, but as you may well know, that’s a left-brain function.

      Present him with a problem and the first thing he’ll ask for are the numbers!!!

      Innovation and imagination are spawned in brains of those who live in a right-brain world. Steve Ballmer  has surrounded himself with too many left-brained people. People who think and talk just like him and serve to reinforce his brand of thinking.

    • G4dualie

      Forget gimmicks! Microsoft needs to redefine “cool”. For too long, they have been sitting on their hands, trying to figure out what it is their competitors are doing. In other words, Microsoft is allowing its competitors to define the market.

      Steve Ballmer is the sales guy! What does he know about innovation? Sure he’s good at math, but as you may well know, that’s a left-brain function.

      Present him with a problem and the first thing he’ll ask for are the numbers!!!

      Innovation and imagination are spawned in brains of those who live in a right-brain world. Steve Ballmer  has surrounded himself with too many left-brained people. People who think and talk just like him and serve to reinforce his brand of thinking.

  • Anonymous

    additional thoughts… I think someone mentioned it here but look at the last crop of buyouts and partnerships. Facebook, yahoo, nokia, skype. Some of those are pretty sweet deals and MS beatout other big names for them. That speaks highly to MS ability to negotiate and the level of promise that the people on the other end of the deal see in MS.

  • http://www.rwalrond.com RWalrond

    I wish someone from Microsoft would step in and shut these people up. What other CEO has lead there company to same financial success as Ballmer in the last 10 years? Can the company do some things better? Of course, but I wonder if they applied the same factors across the industry how many other CEO’s they would recommend to step down?.

    • Brad

      Apple, Google, Oracle, HP, Cisco, and I’m sure several others have all grown earnings faster than MS.

    • Guest

      The only large cap technology stock with a worse ten year record that still has the same CEO is Cisco. And people have been calling for Chamber’s head too. With good reason.

  • Rob

    And here I thought his job was to make a profit for his company . Aren’t stocks sold and intended to increase the available cash revenue of the business ?

    • Anonymous

      get out of here with your common sense. This is hedge fun manager we’re talking about. He has influence…and many leather bound books. We should take him seriously.

    • Guest

      The hedge fund manager isn’t saying anything the entire market and media hasn’t already said for years now. If you really care about the company’s future, maybe you should give them a little credit.

    • Anonymous

      get out of here with your common sense. This is hedge fun manager we’re talking about. He has influence…and many leather bound books. We should take him seriously.

  • someoneinwa

    A hedge fund manager! A man who produces nothing: no product, no service; a man who makes money packaging financial products. But he has opinions and we should all listen to them because someone decided he is “influential.” For the vast majority of the history of financial markets, there was no such thing as a hedge fund, let alone a “hedge fund manager.” We were better off then and we’d be better off now ignoring people like Einhorn. Ballmer is no doubt nearing the end of his time, but he has made a lot of bold moves both business wise and personnel wise recently and he deserves the opportunity to see how they play out.

    • Brent

      Most of his “bold” moves come as a result of losing or falling behind in important new markets or allowing existing dominant positions to become threatened. Why does he deserve more time to see how it plays out? He has had 11 years to work his particular magic on the company. We see the result: a company with marginal growth and declining relevance, with increasing fears about its future.

      Let somebody else run with his “bold” moves. Maybe they can actually execute.

  • http://twitter.com/DaQuantumFro DaMarico Fowler

    I think there are good pints for keeping Ballmer and asking for him to step down. Yes the market would like to see him go, it would mark a change on top. But Ballmer has grown MSFT’s profit steadily the last 10 years, the company has beaten market expectations. The question will be who do get to run Microsoft? A tech guy would be good but he would also need to have experience at business. And to someone earlier Microsoft is the brand and there is nothing wrong with the name, it is the poor choice product names that don’t help

  • http://twitter.com/mcakins McAkins Online

    OK my two cents here too.

    I personally have nothing against Ballmer, but he should sing his loudest with Windows 8 and quit at the top of the success. He has been there for too long and Microsoft desperately need a change of image. The face of Bill Gates and Ballmer are associated with a time that Microsoft ruled with an iron fist which brought them lots of enemy. Bill Gates as left, now is Ballmer’s turn. Microsoft of today is no more the anti-trust riddled Microsoft of ten years ago. They need to convince the consumers they can change. Actually they’ve changed a lot, look at the cloud bet, its a big bet for MS.

    Its all psychology, the competition have damaged MS image a lot, there are lots of bad blood given their history. That is why some people will never touch MS with a stick a mile long no matter how good the product is. MS needs to win the Mind-share war. The Anti-Trust already did its damange, them came Apple with the switcher ads which spreads FUDs for so long. I am only pissed at Ballmer that he didn’t sue Apple on time to put a kibosh on them long ago.

    Image is all important these days, you can’t afford to let your image be tarnished as a top tech company. How do you eat-up an Elephant? Bit by bit says the adage, and that is what the competition have been doing for years. We are seeing its effect now. Ballmer should leave as soon as possible to herald in a new phase for the company. That is what the company needs, and it won’t happen till all the old guard is changed.

    • http://profiles.yahoo.com/u/Y3NNYQR4QWLUCXKK74VSXQFXRI Mohin

      Recognising the image factor is key IMO. Ballmer is a geek in every way. He’s awkward and never fails to cringe. He’s a ruthless businessman no doubt. 

      These days, the growth area is in the consumer side of business and not so much in enterprise. Therefore replacing Ballmer for someone more consumer friendly and perhaps even younger and trendier may help.

      Google has the two founders to do the PR, but a professional CEO to do the real business operations. Apple is already considered a cool company and poses a real danger to Microsoft.

      Ballmer is a 13 Billion dollar man, it shouldn’t be that difficult for him to go.