6 ms·

"Ballmer must go", lead investor tells conference

117 points by nikcub 15y ago

spencerfry 15y 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 15y 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!
  - potatolicious 15y 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.
    - nikcub 15y ago
      they have lost so much good talent during the Ballmer battle years - Allard, Ozzie et al. They could have made a great team with a good CEO, instead we got Ballmer getting rid of them all to strengthen his own position
      - wisty 15y ago
        If that's really the case (and not just that Ozzie was, say, impractical) then that's the best reason I've heard yet to get rid of him. A guy who will fire talent to make himself secure is a huge liability.
        prodigal_erik 15y ago
        Spolsky had an "architecture astronaut" critique in part about how Ozzie keeps blowing years rewriting Notes: http://joelonsoftware.com/items/2008/05/01.html http://joelonsoftware.com/items/2008/05/01.html
        mnutt 15y ago
        Rereading that article, I had forgotten about this part: "because synchronizing files is just not a killer application. I'm sorry. It seems like it should be. But it's not."
        sriramk 15y ago
        I read that same bit again. Kudos to Dropbox - I would have agreed with that statement if Dropbox hadn't existed
        bad_user 15y ago
        That's because Microsoft is not familiar with the single most important principle when designing consumer products ... simplicity and exclusion. Dropbox is useful because it's in essence a simple product. Every time Microsoft designs something, it has to include everything but the kitchen sink.
        count 15y ago
        Remember though, Ballmer is the single largest shareholder of MSFT that is still actively involved with the company. He's pretty secure, and has a tremendous amount of skin in the game. He's also not an idiot.
    - yannickt 15y ago
      "Ballmer has proven that he handles the enterprise products just fine" He can milk the Office cash cow, but has he really driven innovation in the enterprise? Amazon is considered a pioneer of enterprise cloud computing, yet they started as an online retailer, not a platform/infrastructure provider.
joshaidan 15y 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 15y 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 15y 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?
  - joshaidan 15y ago
    That's a good observation. Why does he even need to ban Google/Apple products if the Microsoft ones are that good?
- sorbus 15y 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 15y 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.
- nl 15y 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 15y 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.
    - nl 15y ago
      He's the lead investor for the hedge fund
      - swombat 15y ago
        I'm not sure why you're being downvoted, since you're correct. I guess it's because you didn't provide any supporting information. Here it is: http://www.businessweek.com/news/2011-05-26/greenlight-s-einhorn-says-microsoft-should-replace-steve-ballmer.html http://www.businessweek.com/news/2011-05-26/greenlight-s-ein... > Greenlight Capital Inc. President David Einhorn called for Microsoft Corp.’s board to replace Chief Executive Officer Steve Ballmer, saying the software maker suffers from “Charlie Brown management." Einhorn is the president of Greenlight capital, a hedge fund. > Greenlight, a New York-based hedge fund, added 1.39 million Microsoft shares last quarter, for a total of 9.07 million, according to a filing. The stake is worth $230.2 million. Microsoft’s shares have underperformed the S&P 500 in four of the past five quarters. Also from this article: > Ballmer is the company’s second-biggest shareholder -- with more than 333 million shares, or almost 4 percent. Co-founder and Chairman Bill Gates owns more than 561 million shares, or a 6.7 percent stake, according to Bloomberg data. So Bill Gates + Steve Ballmer don't own 33%, as has been stated elsewhere, but "only" 6.7 percent of this $200bn company.
ikono 15y 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.
- swombat 15y 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 http://news.ycombinator.com/item?id=2587008
  - jeroen 15y ago
    Also incorrect. They own about 10.7%. See the comment on the comment you link to.
    - ikono 15y ago
      That's pretty fascinating. I just assumed that the majority of their net wealth was in the form of MSFT shares. I'm now very curious what the other 2/3s of their net worth is held in. You can see them steadily selling off shares here: http://www.sec.gov/cgi-bin/own-disp?action=getissuer&CIK=0000789019 http://www.sec.gov/cgi-bin/own-disp?action=getissuer&CIK...
      - cpeterso 15y ago
        It's very common for executives to sell shares on a regular (non-secret) schedule to avoid claims of insider trading or false news about "Bill Gates selling stock; MSFT must be in trouble!"
chubs 15y 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 15y 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&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1305921600000&chddm=1140506&chls=IntervalBasedLine&q=NASDAQ:MSFT&ntsp=0 http://www.google.com//finance?chdnp=1&chdd=1&chds=1... IBM: http://www.google.com//finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1305921600000&chddm=1135950&chls=IntervalBasedLine&q=NYSE:IBM&ntsp=0 http://www.google.com//finance?chdnp=1&chdd=1&chds=1...
- j_baker 15y 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 15y 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.
kosei 15y 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 15y 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.
xedarius 15y 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 15y 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.
  - xedarius 15y 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 15y 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.

117 points by nikcub 15y 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 15y 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!
- potatolicious 15y 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.
  - nikcub 15y ago
    they have lost so much good talent during the Ballmer battle years - Allard, Ozzie et al. They could have made a great team with a good CEO, instead we got Ballmer getting rid of them all to strengthen his own position
    - wisty 15y ago
      If that's really the case (and not just that Ozzie was, say, impractical) then that's the best reason I've heard yet to get rid of him. A guy who will fire talent to make himself secure is a huge liability.
      - prodigal_erik 15y ago
        Spolsky had an "architecture astronaut" critique in part about how Ozzie keeps blowing years rewriting Notes: http://joelonsoftware.com/items/2008/05/01.html http://joelonsoftware.com/items/2008/05/01.html
        mnutt 15y ago
        Rereading that article, I had forgotten about this part: "because synchronizing files is just not a killer application. I'm sorry. It seems like it should be. But it's not."
        sriramk 15y ago
        I read that same bit again. Kudos to Dropbox - I would have agreed with that statement if Dropbox hadn't existed
        bad_user 15y ago
        That's because Microsoft is not familiar with the single most important principle when designing consumer products ... simplicity and exclusion. Dropbox is useful because it's in essence a simple product. Every time Microsoft designs something, it has to include everything but the kitchen sink.
      - count 15y ago
        Remember though, Ballmer is the single largest shareholder of MSFT that is still actively involved with the company. He's pretty secure, and has a tremendous amount of skin in the game. He's also not an idiot.
  - yannickt 15y ago
    "Ballmer has proven that he handles the enterprise products just fine" He can milk the Office cash cow, but has he really driven innovation in the enterprise? Amazon is considered a pioneer of enterprise cloud computing, yet they started as an online retailer, not a platform/infrastructure provider.

joshaidan 15y 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 15y 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 15y 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?
- joshaidan 15y ago
  That's a good observation. Why does he even need to ban Google/Apple products if the Microsoft ones are that good?
sorbus 15y 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 15y 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.

nl 15y 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 15y 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.
  - nl 15y ago
    He's the lead investor for the hedge fund
    - swombat 15y ago
      I'm not sure why you're being downvoted, since you're correct. I guess it's because you didn't provide any supporting information. Here it is: http://www.businessweek.com/news/2011-05-26/greenlight-s-einhorn-says-microsoft-should-replace-steve-ballmer.html http://www.businessweek.com/news/2011-05-26/greenlight-s-ein... > Greenlight Capital Inc. President David Einhorn called for Microsoft Corp.’s board to replace Chief Executive Officer Steve Ballmer, saying the software maker suffers from “Charlie Brown management." Einhorn is the president of Greenlight capital, a hedge fund. > Greenlight, a New York-based hedge fund, added 1.39 million Microsoft shares last quarter, for a total of 9.07 million, according to a filing. The stake is worth $230.2 million. Microsoft’s shares have underperformed the S&P 500 in four of the past five quarters. Also from this article: > Ballmer is the company’s second-biggest shareholder -- with more than 333 million shares, or almost 4 percent. Co-founder and Chairman Bill Gates owns more than 561 million shares, or a 6.7 percent stake, according to Bloomberg data. So Bill Gates + Steve Ballmer don't own 33%, as has been stated elsewhere, but "only" 6.7 percent of this $200bn company.

ikono 15y 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.

swombat 15y 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 http://news.ycombinator.com/item?id=2587008
- jeroen 15y ago
  Also incorrect. They own about 10.7%. See the comment on the comment you link to.
  - ikono 15y ago
    That's pretty fascinating. I just assumed that the majority of their net wealth was in the form of MSFT shares. I'm now very curious what the other 2/3s of their net worth is held in. You can see them steadily selling off shares here: http://www.sec.gov/cgi-bin/own-disp?action=getissuer&CIK=0000789019 http://www.sec.gov/cgi-bin/own-disp?action=getissuer&CIK...
    - cpeterso 15y ago
      It's very common for executives to sell shares on a regular (non-secret) schedule to avoid claims of insider trading or false news about "Bill Gates selling stock; MSFT must be in trouble!"

chubs 15y 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 15y 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&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1305921600000&chddm=1140506&chls=IntervalBasedLine&q=NASDAQ:MSFT&ntsp=0 http://www.google.com//finance?chdnp=1&chdd=1&chds=1... IBM: http://www.google.com//finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1305921600000&chddm=1135950&chls=IntervalBasedLine&q=NYSE:IBM&ntsp=0 http://www.google.com//finance?chdnp=1&chdd=1&chds=1...
j_baker 15y 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 15y 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.

kosei 15y 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 15y 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.

xedarius 15y 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 15y 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.
- xedarius 15y 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 15y 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.