6 ms·
Why Steve Ballmer will resign from Microsoft in 2010
- kakooljay 17y agoBallmer's not exactly a visionary: In a post from June [http://thenextweb.com/2009/06/02/web-death-google 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.
- nearestneighbor 17y agoIf someone like that could be the CEO of Microsoft, anyone can!
- wmeredith 17y agoThe 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.
- kakooljay 17y agoGood point - &, to be fair, let's not forget that even Bill Gates (among others) also underestimated the potential of the Internet in the early '90s...
- RyanMcGreal 17y agoIt's fun to go back and read an early edition of Gates' The Road Ahead, in which he just completely misses the value, growth potential and benefits of an open, neutral data network. Rather, he simply transposed "a PC in every house" to "an MSN connection in every house". In fairness, Gates caught on pretty fast and didn't let his own prior prognostication get in the way of positioning Microsoft to extend his company's product lock-in to customers' internet access (see: IE).
- nearestneighbor 17y agoBenefit of hindsight or not, but I think predicting that the number of web sites would actually decrease is showing a total lack of common sense. If I were a shareholder, I'd want someone else at the helm.
- trafficlight 17y agoAmazing. He really missed the entire point of the internet.
- axod 17y agoThat pretty much defines Microsoft.
- vorador 17y agoWell, 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.
- trafficlight 17y agoYou must have some numbers to back up such a bold statement. Otherwise that's a ridiculous assumption.
- vorador 17y agoI don't have numbers - actually nobody has them, but the growth of web 2.0 websites had a consequence : less and less people host themselves their websites.
- hapless 17y agoMicrosoft'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.
- protomyth 17y agoIs the the Xbox 360 profitable by itself, or are they still using the Mac BU to cover the losses?
- btilly 17y agoThe 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.
- protomyth 17y agoOk, you pretty much stated my big problem with Microsoft. They don't have a great idea for a new product, but their competitor of the week has a product that they want to stomp. What business does Microsoft have going after Sony?
- gloob 17y agoCosting Sony money would reduce the amount of money Sony could spend on other ventures. At least a subset of those "other ventures" are things Microsoft is actively interested in. Disclaimer: I have no actual experience with either Microsoft or Sony when it comes to this sort of thing, so I might be way off target here.
- edw519 17y ago2 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 17y agoHave you even tried to contribute to the discussion?
- RyanMcGreal 17y agoSometimes a negative object lesson is helpful.
- edw519 17y agoThe 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 17y agoI thought it was funny.
- wglb 17y agoOr, "the easiest way to make a small fortune is to start with a large one"?
- tspiteri 17y agoDismissing 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 17y agoWell its not too far off the mark since Windows is preinstalled on about 90% of pcs.
- bpyne 17y agoIt 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 17y agoIf 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.
- protomyth 17y agoGeneral Electric 2.0 -- the market may not like that
- protomyth 17y agoMy 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 17y agoComparisons of stock prices circa 1999 to stock prices 2009 are pretty ridiculous.
- SamAtt 17y agoThis 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&c=2000&d=09&e=6&f=2009&g=d&z=66&y=2442 http://finance.yahoo.com/q/hp?s=%5EIXIC&a=00&b=1&...)
- brg 17y agoMy 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.