Tuesday, March 24, 2009

Is it "Steve Ballmer or Steve Yang"

Mr. Ballmer while speaking to analysts stated ""I don't want to be known as the Jerry Yang of this market." Refer to:


Mr. Ballmer was referring to Jerry Yang the former CEO of Yahoo. Jerry Yang was eventually forced to resign. Mr. Ballmer in his statement was referring to the fact that Mr. Yang invested heavily in the search business and still failed to remain competitive with Google.

In the last post on this blog we cited the fact that "search" for Microsoft has reached a record low with 8% of the market. However, rival Google commands over 60% share. Refer to http://www.pcworld.com/article/161222/report_microsoft_us_search_share_hits_12month_low.html?tk=rss_news

Microsoft has pursued numerous acquisitions to remain competitive with Google and Yahoo. Refer to http://en.wikipedia.org/wiki/List_of_companies_acquired_by_Microsoft_Corporation

Within the Wikipedia post there are references to numerous acquisitions by Microsoft. The article refers to acquisitions such as Medstory, Jellyfish, Farecast, Fast Search and Transfer, Greenfield Online and Powerset. These acquisitions alone total approximately $2 billion.

It also acquired Onfolio which was integrated into the Windows Live tollbar. However, by 2008 Microsoft announced that this was discontinued.

The number of acquisitions in this sector, such as search technology, the company has displayed very minimal revenue growth.

In 2005, Microsoft generated online advertising revenue of $1.5 billion. In 2007, Microsoft reported revenue of $2 billion. In 2005, Microsoft controlled 8% of the market share. In 2007, it appears that it had declined to approximately 6% market share. Currently, as indicated by the PC World report Microsoft controls only 8%. Therefore, despite various acquisitions within this sector there is minimal improvement. According to Microsoft Watch, the company in 2008 within Online services experienced a loss of $468 million. Refer to http://www.microsoft-watch.com/content/corporate/microsoft_q4_2008_by_the_numbers.html

Yahoo in the period of 2005-2007 was able to increase advertising revenue from $4.5 billion to $6.5 billion in 2007. However, it has lost minor market share to Google, and currently controls approximately 20%. In 2008, Yahoo posted revenue of $7.2 billion.

According to the data, Microsoft pursued numerous acquisitions from 2005 to 2008. The company has failed to increase market share and has experienced minor increase in revenue. Yahoo within the same period has created marginal increase in share and increased advertising revenue by approximately $2.7 billion.

Mr. Ballmer stated "he didn't want to be the Jerry Yang of the sector". One major dilemma. It appears as though he is.

To add further to Mr. Ballmer, he also failed the Yahoo bid. During his tenure shareholders have lost over $300 billion in market value. The stock has been stagnant for eight years. He has presided over poor decisions, massive spending, and poor company image (products, layoffs, Vista, Lawsuits).

The conclusion. Mr. Ballmer might as well legally change his name to Steve Yang.

Ironfire Capital through shareholder activism was instrumental in forcing Terry Semel to resign from Yahoo. Additionally, if shareholders rallied and forced the resignation of Jerry Yang, why haven't Microsoft shareholders forced the resignation of Mr. Ballmer?

This leads to one final reference. Although the article was posted in 2006, it still pertains to current issues because it appears that nothing has changed . The author states "If shareholders ever want to make decent money on their MSFT stock, they are going to have to fire Steve Ballmer". Refer to http://seekingalpha.com/article/11960-microsoft-s-steve-ballmer-should-be-fired-msft

This campaign is seeking to rally support to effect change. Microsoft employees have stated if Mr. Ballmer remains at the helm Microsoft will eventually become a penny stock.

To offer shares for support contact newstrategy4msft@gmail.com

We can be contacted at thecrandreagroup@hotmail.com

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