There are numerous reports and comments concerning the credibility of Mr. Ballmer as CEO of Microsoft. In our last post we referenced a poll by Glassdoor and CNBC. Refer to http://www.glassdoor.com/blog/2009/01/cnbc-reports-on-ceo-ratings-the-future-of-glassdoor-and-whos-getting-a-bonus/
A simple review of the comments at Mini Microsoft would also quickly demonstrate the perception towards Mr. Ballmer as CEO. Refer to http://minimsft.blogspot.com/
Recently, Mr. Ballmer conducted a speech for students at Stanford University. A article with CBS Marketwatch called "Microsoft's Ballmer says economy is really bad" outlines this speech. Refer to http://www.marketwatch.com/news/story/microsofts-ballmer-says-economy-really/story.aspx?guid=%7BB93A5CA6%2D5F70%2D4D64%2D9459%2D132B37F41710%7D&dist=TQP_Mod_mktwN
The first problem with this situation is the university selection for a speaker. The speech is titled "Innovation & Entrepreneurship: Opportunities in Difficult Times" and they select Mr. Ballmer. Could the university not find a "Real Entrepeneur" to conduct the speech?
They select Mr. Ballmer. The only reason he is the CEO of the largest tech company is his friendship with the entrepeneur that founded Microsoft. Come on Stanford, if your providing a presentation on a topic perhaps try to get an expert on the topic. If Bill G is not available alteast get someone that has expereince in starting a company. Mr. Ballmer is better suited to conduct a speech concerning "How to Destroy the Start-Up Your Friend Has Founded".
It is ironic that Mr. Ballmer is presenting a speech on "Innovation and Opportunities in Difficult Times". Since Mr. Ballmer has failed to inject Microsoft with innovation it has lead the company to "difficult times".
In the CBS article is the reference to Mr. Ballmer indicating that the economy presents the opportunity to make better products. What products is he referring to?
Mr. Ballmer certainly cannot be referring to Microsoft products. Make the Zune better? Make MSN better? Make Longhorn...Vista (Win 7...8..9) better. Make a Smart Phone with Verizon better?
Mr. Ballmer then has the audacity to state " Microsoft's lower profile in the Internet search market gave it certain advantages. "The No. 1 player is a lot bigger than us in search," he said. "We're more like a start-up than a big guy in search."
Lets get serious. This is a statement from a CEO that has been obsessed with competing with Google. This is a CEO that has pursued billions of dollars worth of acquisitions in this sector. He is the same CEO that pursued a 65% premium bid for a floundering Yahoo to compete with Google. Then Mr. Ballmer has the nerve to state it provides "certain advantages".
Reality check Mr. Ballmer. Microsoft fails to resemble a start-up. Microsoft was engaged in Online Services long before the Start-Up Google. The only area that your statement is correct is this once obscure Start-Up called Google has become Number One.
Mr. Ballmer states " that gave the company the chance to try things that a market leader, like Google Inc. , might not be able to do". Please provide clarity Mr. Ballmer. It gave Microsoft opportunity to try what?
Blow through billions of dollars on acquisitions and R&D and fail to elevate the market share?
Google as a leader has introduced new services. It has expanded markets. It has gained more market share. It has increased revenue and earnings. Perhaps this is why the company is Number One.
If Microsoft Online Services was a start-up it would have gone bankrupt years ago. Its only survival is the cash generated by the OS division initially created by the Entrepeneur Mr. Gates.
If Microsoft Online was truly a start-up it should have experienced the fate of most start-ups and been acquired by a larger competitor, such as Google.
Mr. Ballmer then states that Microsoft will invest $9 billion on R&D. So, this $9 billion investment will be spent on improving existing products and making them better?
It will be spent to follow the "New Strategy" that was created by this campaign and revised by Microsoft employees?
Mr. Ballmer will spend capital to make Win 7 better. Mr. Ballmer will deploy capital to make Online Services better. But, lets not forget that Online is like a start-up with advantages and therefore can pursue things that Google cannot. Such as a deal with Yahoo to become more competitive in the Online sector.
It seems evident that its not the economy that is bad. Despite the poor economy, competitors have posted positive earnings. Mr. Ballmer failed to recognise the importance of Online and is busy trying to rectify this dilemma. However, Mr. Ballmer tries to down play the magnitude of this blunder and state that its better for the company.
Mr. Ballmer failed to recognise the importance of handheld and netbooks. Subsequently, this had a dramatic effect on the company revenue and earnings. The company is equally dependent on OS for revenue and subsequently the company experienced a double digit decline. Refer to http://money.cnn.com/2009/04/23/technology/microsoft_earnings/index.htm?postversion=2009042316
We will state "Mr. Ballmer we told you so".
When this campaign was launched the main argument for the necessity for a "New Strategy" was to insulate the company from a decline in OS revenue. It was stated there is a trend in SaaS, netbooks, and mobile. It was stated that OS was losing share.
It can be concluded that the only thing that is truly "really bad" is Mr. Ballmer as CEO of Microsoft. We have two suggestions for Mr. Ballmer. First suggestion to Mr. Ballmer. Leave Microsoft and become a public speaker. You can provide insight into how to destroy employee morale through layoffs and poor management. How to miss opportunities and blame other external factors. How to destory billions in shareholder value.
Second suggestion to Mr. Ballmer. Just leave Microsoft. Leave before you lead Microsoft from being "bad" to "really bad".
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