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Prominent hedge fund manager calls for Microsoft's Ballmer to step down

post #1 of 116
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Influential hedge fund manager David Einhorn called Microsoft CEO Steve Ballmer "the biggest overhang" on the company's stock at an investment conference on Wednesday, saying he should step aside and "give someone else a chance."

Einhorn serves as president of the Greenlight Capital hedge fund, which had roughly $7.9 billion in assets at the start of the year. He gained prominence in the spring of 2008 when he predicted the accounting troubles that would eventually lead to investment bank Lehman Brothers' collapse.

As of the end of the first quarter, Greenlight owned approximately 9 million shares of Microsoft, or roughly 0.11 percent of the company's outstanding shares.

Speaking at the Ira Sohn Investment Research Conference in New York on Wednesdsay, Einhorn voiced strong concerns over Ballmer's ability to lead the company into the post-PC era, characterizing him as stuck in the past, Reuters reports. According to the report, Einhorn's remarks echoed comments that "some investors have said for years in private."

"His continued presence is the biggest overhang on Microsoft's stock," Einhorn said, as he called for Ballmer to "give someone else a chance" to lead. Shares of Microsoft closed the day at 24.19, up 0.17 percent. The company's stock has stock has dropped by more than 50 percent since Ballmer took over for founder Bill Gates as CEO in January 2000.

Einhorn also called for Microsoft to consider strategic alternatives to its the online services division, which has lost $7 billion over the past four years, according to the report.

Gates brought Ballmer on as Microsoft's first business manager in 1980. Ballmer earned a bachelor's degree in mathematics and economics from Harvard, where he lived down the hall from Gates, before attending the Stanford University Graduate School of Business.

Microsoft Chief Executive Steve Ballmer | Photo Credits: AP

Ballmer has been relatively candid about his recent struggles in the company. Earlier this week, he admitted that Windows Phone 7 had arrived "a year later" that he wished.

Last summer, he noted that the company felt pressure from Apple, which had sold more iPads "than [he'd] like them to sell."

An SEC filing by the company last fall revealed that Microsoft's board of directors had were dissatisfied with Ballmer's performance in the mobile market. "The unsuccessful launch of the Kin phone; loss of market share in the company's mobile phone business; and the need for the company to pursue innovations to take advantage of new form factors" were cited as areas of concern.

At a developer forum this week, comments made by Ballmer regarding the next version of Windows were later characterized as a "misstatement."

Several key executives at Microsoft have left the company in recent months. Last October, Ray Ozzie, who served as Microsoft's Chief Software Architect after Gates left, resigned. Following the announcement that Ozzie would step down, one analyst commented that his departure highlighted the fact that "Microsoft has been kind of lost in the woods ever since Bill Gates left."

Several other top executives at the company, including Xbox and Zune leader J Allard; Entertainment & Devices Division head Robbie Bach; and Business Division head Stephen Elop, have left or been dismissed in the past year.



"Thousands of employees have been laid off or fired [from Microsoft] over the past two years," according to Don Dodge, who served as Microsoft's director of business development for its Emerging Business Team before being laid off.

"Losing a seasoned exec like Bob Muglia is a big, but recoverable loss." Dodge, who now works for Google, wrote in a blog post earlier this year. "Losing Muglia, Robbie Bach, Steve Elop, Ray Ozzie, Chris Liddell, Kevin Johnson, Jeff Raikes, and other senior execs is devastating. The effects aren't visible yet. It takes years to unfold. Each individual business division will get a new leader, and revenues will continue to chug along.

"But, who will be the visionary for the future? And, who will be ready to step in as CEO when Ballmer leaves? Those are billion dollar questions."
post #2 of 116
My how the mighty have fallen. If this p***k hadn't displayed so much arrogance over his tenure, I wonder if I would have felt so much glee in reading this article.
post #3 of 116
Bill Gates will return as "CEO SP2"
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post #4 of 116
True. Here's another tip: Ditch your crappy OS and start afresh on top of Unix.
Perhaps then you might release a product on time that works.
post #5 of 116
this was a little obvious i can say i definitely saw this coming especially after the retracting of his statement about windows 8.
post #6 of 116
If Microsoft dies, my Clues point to Steve Ballmer, with grit and perspiration, in the boardroom.
post #7 of 116
Pllleeeeaaaaassseee let him stay, just one or two more product flops! Pllleeeaaaaasseeee!!!!
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post #8 of 116
They've set themselves up to be a profitable company for a long, long time. Credit to them for that. But internally, I can kinda see them being a headless chicken as far as direction and big ideas go.
post #9 of 116
I feel for the guy but I'm not so sure he's doing a BAD job. He's made some mistakes, but so have dozens of other CEOs; their replacements haven't always been much better. Microsoft is a monstrosity of a ship and it's slow to change course. Nevertheless, earnings look pretty damned good to me. Ballmer is not without his flaws and he is a victim of the times, but I doubt a changeup in CEO will do much for them. Better to stick with continuity with someone who understands the company. Anyone else coming in will be so overwhelmed that I imagine they'd divest most of the company before they make their investors happy. Yet IDK if that's what MS should be doing at this point. From where I'm sitting, you need as much vertical integration as possible to go up against Apple.
post #10 of 116
I don't know how good or bad of a job he really is doing in the day to day running of the company. But i do feel like he is PERCEIVED as an asshat. And that cant be helping Microsoft's stock when so much of the value in the tech world is perception
post #11 of 116
Balmer is a chump, I find it hard to see how people in Microsoft would respect him.
post #12 of 116
Regardless of his personality, whether you like him personally or not, it is undeniable that Ballmer is not a proven technology visionary. So yes, it's time for someone else to try. Unfortunately, the recent purges leave the ranks thin. Therefore, it's necessary to bring in an outsider. Fortunately, Carol Bartz will likely be purged from Yahoo soon and so perhaps she will be available.

Just joking, Bartz is a bigger flop than Ballmer. You can switch the two of them and not notice a difference.
post #13 of 116
Boom!
post #14 of 116
It's my understanding that since Ballmer took over, he has increased revenue year-over-year. So give him that much credit.

Of course, much of that was built from Gate's tenure and I suppose it did not take much to keep that Windows/Office cashcow moving.

That being said, when it comes to actually creating new products and stay on top of the curve in the post-PC era, Ballmer has fallen face-first on concrete.

It's time to change the guard at MS. A few more years of constant battles from Apple and Google/Android and Ballmer's shop will become very irrelevant if he continues to stay at the helm.
post #15 of 116
The biggest hang on the Microsoft stock is the overly split Microsoft stock.

That stock split so many times between the mid-80s to the year 2000 it's no wonder the stock won't move anywhere.

They should have accepted the break up into 3 separate corporations, if they were concerned with stock price.

Microsoft is dealing with 8.43 Billion Shares.

Apple is dealing with 921.28 Million Shares.

Then you combine that overly owned Microsoft stock with Ballmer taking the helm and you've got a decade of incompetence across the entire MS Executive Teams, not just Ballmer.
post #16 of 116
The world is a better place with Ballmer at the helm of Microsoft. They will stay laser-focused on the mid-1990s. They will milk their corporate IT clients for all they can. They will slowly, ever so slowly, fade into history along with Burroughs, Sperry, Univac, NCR, Control Data, Four Phase, Tandem, and hundreds of other techno-ghosts.

And the rest of the tech world can look at them and say "We must never let that happen to us."

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post #17 of 116
Quote:
Originally Posted by ranReloaded View Post

Pllleeeeaaaaassseee let him stay, just one or two more product flops! Pllleeeaaaaasseeee!!!!

lol. you are cruel, give them a chance.
post #18 of 116
Ballmer should go. Microsoft should be split up. The crummy products, which means most SKUs, should be tomb-stoned. Then they might have a chance of making something innovative and beneficial.

Year-over-year revenue growth is not a measure of success any more than inflation could be considered a success. The only thing Ballmer did right was not drive the company into the ground quickly. But in slow motion that looks to me like what's happening.

I was there during the transfer of power from Gates to Ballmer where things changed significantly internally and not for the better. I walked away, forfeiting thousands of stock options which in the end never would have been worth anything. Microsoft's performance today is merely momentum from the past.
post #19 of 116
Quote:
Originally Posted by magicj View Post

Balmer is a tool, but he is not the problem. The company is too diversified, lacking focus. Splitting the company up is probably what needs to be done. Something like this, perhaps:

Computing. Windows, SQL Server, Office, and similar products.
Entertainment. XBox, Windows Phone, MSNBC, Bing

The argument against doing this is you lose the synergies between the various divisions of MS. But it's starting to become clear those synergies either don't actually exist or are not as powerful as assumed.

Yes, spot on!
post #20 of 116
Quote:
Originally Posted by KingKuei View Post

I feel for the guy but I'm not so sure he's doing a BAD job. He's made some mistakes, but so have dozens of other CEOs; their replacements haven't always been much better. Microsoft is a monstrosity of a ship and it's slow to change course. Nevertheless, earnings look pretty damned good to me. Ballmer is not without his flaws and he is a victim of the times, but I doubt a changeup in CEO will do much for them. Better to stick with continuity with someone who understands the company. Anyone else coming in will be so overwhelmed that I imagine they'd divest most of the company before they make their investors happy. Yet IDK if that's what MS should be doing at this point. From where I'm sitting, you need as much vertical integration as possible to go up against Apple.

I have to disagree. He has made some horrendous calls and his arrogant panning of competitors products that go on to sell millions has to be galling for share holders. Bill Gates was a smart guy, ok copied a lot but still had some vision - right place right time also requires you to notcie! For a microsoft CEO to say windows 7 is vista done right is just plain incompetent, he basically openly admitted they released a sub standard product with no apology. I would be furious as a share holder and demoralised as an employee. Microsoft is still massive and can do great things given the right leader and we can all benefit as it drives competition. But this guy is just like shooting fish in a barrel for people like Jobs, google etc... We need more pressure from serious companies to make apple cheaper and better.
post #21 of 116
Quote:
Originally Posted by magicj View Post

Balmer is a tool, but he is not the problem. The company is too diversified, lacking focus. Splitting the company up is probably what needs to be done. Something like this, perhaps:

Computing. Windows, SQL Server, Office, and similar products.
Entertainment. XBox, Windows Phone, MSNBC, Bing

The argument against doing this is you lose the synergies between the various divisions of MS. But it's starting to become clear those synergies either don't actually exist or are not as powerful as assumed.

Right, so change the CEO and change the philosophy. Ok not trivial but could be a question of long (ok really long) term survival.
post #22 of 116
Quote:
Originally Posted by mdriftmeyer View Post

The biggest hang on the Microsoft stock is the overly split Microsoft stock.

That stock split so many times between the mid-80s to the year 2000 it's no wonder the stock won't move anywhere.

They should have accepted the break up into 3 separate corporations, if they were concerned with stock price.

Microsoft is dealing with 8.43 Billion Shares.

Apple is dealing with 921.28 Million Shares.

Then you combine that overly owned Microsoft stock with Ballmer taking the helm and you've got a decade of incompetence across the entire MS Executive Teams, not just Ballmer.

fair point! confused between uk and american billion here though. i assume billion is million million otherwise it wouldn't be such a biggie.
post #23 of 116
They just need to start innovating and stop copying. An order of magnitude I don't think Ballmer is capable of doing. Bless the man (or woman) who takes his lead.
post #24 of 116
Ballmer is the best employee Apple's ever had.
post #25 of 116
And it has for years. Always hovering around US$25.
Good, stable investment for those hedgefunds, indeed.
Since begin 2000 no increases in MSFT, while AAPL really took off in 2004 (it first took 3-4 years to recover from being undervalued after the 2000 tech stock collapse) and has since risen by 2000%.
Had the pension funds invested in AAPL, many people may have been able to hold onto their homes in 2008-2009.

Of course, Microsoft can't be blamed for the poor performance of those funds. Instead some of those "prominent" hedge fund managers have been part of the problem.

Proclaiming to see the light now is just a ploy to try and prevent their heads from rolling.
post #26 of 116
Quote:
Originally Posted by magicj View Post

One other thing to point out, while Balmer gets the heat, Microsoft's stock price has been flat for the last 10 years, extending back well into the Bill Gates era.

Very, very, true. A lack of vision can be attributed to Balmer and Gates.
post #27 of 116
Quote:
Originally Posted by VanFruniken View Post

And it has for years. Always hovering around US$25.
Good, stable investment for those hedgefunds, indeed.
Since begin 2000 no increases in MSFT, while AAPL really took off in 2004 (it first took 3-4 years to recover from being undervalued after the 2000 tech stock collapse) and has since risen by 2000%.
Had the pension funds invested in AAPL, many people may have been able to hold onto their homes in 2008-2009.

Of course, Microsoft can't be blamed for the poor performance of those funds. Instead some of those "prominent" hedge fund managers have been part of the problem.

Proclaiming to see the light now is just a ploy to try and prevent their heads from rolling.

I personally do not want M$ to fail. Im a big M$ Office user. They do need to pull their head out of their Ballmer though, and get a change of leadership.

But my god, who edited that article? I'd be embarrassed to have my name associated with it. So many mistakes!
post #28 of 116
The day Ballmer leaves M$ is the day I'll build a new PC with Windows running on it. F U Ballmer. You ruined M$. (Then again Gates couldn't have been too smart for bringing this clown in to begin with.)


HAHAHAHA:
Quote:
I personally do not want M$ to fail... They do need to pull their head out of their Ballmer though, and get a change of leadership.

Couldn't agree more. :-)
post #29 of 116
[quote=ranreloaded;1870205]
post #30 of 116
Quote:
Originally Posted by ranReloaded View Post

Pllleeeeaaaaassseee let him stay, just one or two more product flops! Pllleeeaaaaasseeee!!!!

+1
post #31 of 116
Should I really be surprised that people here seem to be passing judgement on Microsoft's products without even using them?

Clearly none of you saying things like "crummy products" and "crappy OS" have used Microsoft's offerings lately. If you had, you would be praising what is on offer:

Windows 7
Office 2010
Office 2011 for Mac
Internet Explorer 9
Windows Phone 7
Zune
Xbox

All of these are truly excellent products, most of them worthy of being the market leader. Certainly the Windows of today is the best ever and I now have far more confidence in the reliability and stability of Windows than I do in Mac OS X.

Microsoft also offers incredibly good support for previous versions, continuing to release updates long after a new version is on sale. This means that Windows XP and Windows Vista are now rock solid (a long way from where they were 6 or 7 years ago).
post #32 of 116
I think it's good for the industry and everyone else but Microsoft. But considering Microsoft could never innovate or produce anything worthwhile, it's kind of nice to have a symbolic idiot at the helm of the company too, making sure they don't suddenly start buying smart people and turning the course towards open standards, cooperation, the Internet and post PC computing era.

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post #33 of 116
Quote:
Originally Posted by neiltc13 View Post

Should I really be surprised that people here seem to be passing judgement on Microsoft's products without even using them?

Clearly none of you saying things like "crummy products" and "crappy OS" have used Microsoft's offerings lately. If you had, you would be praising what is on offer:

Windows 7
Office 2010
Office 2011 for Mac
Internet Explorer 9
Windows Phone 7
Zune
Xbox

All of these are truly excellent products, most of them worthy of being the market leader. Certainly the Windows of today is the best ever and I now have far more confidence in the reliability and stability of Windows than I do in Mac OS X.

Microsoft also offers incredibly good support for previous versions, continuing to release updates long after a new version is on sale. This means that Windows XP and Windows Vista are now rock solid (a long way from where they were 6 or 7 years ago).

I use Windows 7 daily at work and it's just as clunky windows as ever. It still lacks polish, it's hard to drive, and frankly it looks hideous with fat, glowing, multicolored, out of theme title bars and borders etc. It's a valiant effort, but it just proves that Microsoft has no "soul" and can't do anything unexpected, stylish, toned down and usable.

Internet Explore always was and remains a joke, I can't believe someone actually brought that into conversation when mentioning good products. The only reason anyone at all uses IE is because it comes with Windows and Windows is a monopoly.

Windows Phone 7, consumers have voted on that one pretty well. In areas where Microsoft doesn't have monopoly, their products actually have to compete on merit. And there they do abysmally.

Microsoft bet their company on Windows and Office. And both are so entrenched on the desktop and have blinded Microsoft towards the Internet, distributed cloud computing and the world of opportunities and truly disruptive technologies that fundamentally change the way we do work and live. Internet somehow totally passed them by, because they were so busy making sure everyone keeps buying office and desktop crap. And now their major competitors have over a decade of head start that Microsoft simply doesn't have a internal culture needed to compete. It's a huge change and they might as well close shop and take the investor money and capital they have and start a brand new company. It's probably easier than changing your culture and mind set they now have.

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post #34 of 116
Quote:
Originally Posted by ranReloaded View Post

Pllleeeeaaaaassseee let him stay, just one or two more product flops! Pllleeeaaaaasseeee!!!!

its too horrible to watch !!!!

yrs ago i would been so happy to see msft eat a large shit bag for lunch ,

but now like who cares .

msft should sell xbox and all games to apple

yes

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post #35 of 116
i miss longhorn


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post #36 of 116
Quote:
Originally Posted by alkrantz View Post

I don't know how good or bad of a job he really is doing in the day to day running of the company. But i do feel like he is PERCEIVED as an asshat. And that cant be helping Microsoft's stock when so much of the value in the tech world is perception

True that but failure after failure doesn't help his cause.
post #37 of 116
Developers.





Developers, developers, developers, developers!
Developers, developers, developers, developers!
Developers, developers, developers, developers!
Developers, developers, developers, developers!

After that performance, Ballmer became untouchable. It might be fun to talk about getting rid of him, but Uncle Fester has guaranteed him his job until he gets his own personal Blue Screen.
post #38 of 116
Quote:
Originally Posted by neiltc13 View Post

Should I really be surprised that people here seem to be passing judgement on Microsoft's products without even using them?

Clearly none of you saying things like "crummy products" and "crappy OS" have used Microsoft's offerings lately. If you had, you would be praising what is on offer:

Windows 7
Office 2010
Office 2011 for Mac
Internet Explorer 9
Windows Phone 7
Zune
Xbox

All of these are truly excellent products, most of them worthy of being the market leader. Certainly the Windows of today is the best ever and I now have far more confidence in the reliability and stability of Windows than I do in Mac OS X.

Microsoft also offers incredibly good support for previous versions, continuing to release updates long after a new version is on sale. This means that Windows XP and Windows Vista are now rock solid (a long way from where they were 6 or 7 years ago).

As a former Winodws lover and Apple hater, I just have to comment here.
Windows 7 - better than previous versions, but still has every one of the same problems
Office 2010/2011 for Mac - annoying to use, but better than most (prefer Pages, though)
Internet explorer 9 - there is a very good reason why the joke is that the only thing it's good for is to download another browser
Windows Phone 7 - better than windows mobile, and frankly I like it better than android, but still needs a whole lot of work
Zune - can you say: dismal sales? No market? Discontinued?
Xbox - their best product, and actually deserves it's position

Windows/MIcrosoft could be a lot better, but their biggest problem is legacy. They have to support so many hardware configurations and outdated software that any program becomes monstrously bloated and full of serious bugs. They need to ditch the NT system, drop a lot of legacy, and build a new system from scratch. Then they could just have a simple emulator to run .exe files for transition compatibility, kind of like Apple did when it switched from powerPC to intel
post #39 of 116
Quote:
Originally Posted by magicj View Post

Balmer is a tool, but he is not the problem. The company is too diversified, lacking focus. Splitting the company up is probably what needs to be done. Something like this, perhaps:

Computing. Windows, SQL Server, Office, and similar products.
Entertainment. XBox, Windows Phone, MSNBC, Bing

The argument against doing this is you lose the synergies between the various divisions of MS. But it's starting to become clear those synergies either don't actually exist or are not as powerful as assumed.

Not too diverse, simply ineptly diverse. Want diverse: Sony, or Samsung, or pretty much any Asian conglomerate that do everything from growing mangoes to building sky scrapers.

Microsoft had a plan that worked for their time and never altered it - ever. They have to grow with the times because 'the times, they are a changin'! or have changed already.
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post #40 of 116
You are correct the company has lost focus. Yet, if that is not the CEO's job, then what is? That is what Jobs offers Apple.

Quote:
Originally Posted by magicj View Post

Balmer is a tool, but he is not the problem. The company is too diversified, lacking focus. Splitting the company up is probably what needs to be done. Something like this, perhaps:

Computing. Windows, SQL Server, Office, and similar products.
Entertainment. XBox, Windows Phone, MSNBC, Bing

The argument against doing this is you lose the synergies between the various divisions of MS. But it's starting to become clear those synergies either don't actually exist or are not as powerful as assumed.
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