Firing Steve Ballmer
IF you were a Microsoft stockholder, would you fire Steve Ballmer?
Newsweek predicts you will, just as Ballmer marks his 10th anniversary as chief executive at the software giant.
“Microsoft stock has dropped by nearly 50 percent on his watch, lagging not just other tech companies but even the Dow Jones industrial average,” the magazine says in its Tech Predictions for 2010. “Distracted by the Windows Vista fiasco, Ballmer has missed every big new tech market of the past decade. Google won the race for Internet search and keyword advertising. Apple won in MP3 players and online music sales, and now holds the high ground in mobile phones, while Windows Mobile fades away. Microsoft’s Zune music player is a dud. Bing, Microsoft’s search engine, will never catch Google.”
“He’s a screamer and a bit of a bully--not the easiest guy to work for. If Microsoft were any other company, this guy would be in trouble,” Newsweek continued. “Investors must be getting restless. Soon they’ll start calling for a shake-up.”
Adding insult to injury, the Harvard Business Review released its list of 100 Best-Performing CEOs shortly Newsweek’s prediction, giving the top spot to Steve Jobs of Apple.
The list, whittled down from 2,000 chief executives of publicly traded companies worldwide, also included John Chambers of Cisco at No. 4; Jeff Bezoz of Amazon at No. 7; and Eric Schmidt of Google at No. 9. Even Margaret Whitman of eBay (No. 8) and John Thompson of Symantec (No. 19) made it to the list. Ballmer didn’t.
To be fair, it should be pointed CEOs of other high-profile technology companies didn’t make it to the list either, including HP’s Mark Hurd and Intel’s Paul Otellini. (Bill Gates, under whose shadow Ballmer toils, and Oracle’s Larry Ellison didn’t make it to the list because the Review considered only chief executives who took the leadership role between January 1995 and December 2007.)
Still, it’s got to hurt to be nowhere on the list when your two fiercest competitors, Apple and Google, are so prominently positioned.
Then, a few days before Christmas, more bad news.
A US federal appeals court upheld a $290 million judgment against Microsoft Corp. and ordered it to stop selling MS Word unless it removed code that violated the software patent of an obscure Canadian company, i4i, that sued it in Texas and won.
The ruling is ironic, given Microsoft’s use of software patents earlier this year to bludgeon TomTom, a Dutch maker of car navigation systems, into settling over its use of the Linux kernel. Ballmer has bellicosely proclaimed that the kernel violates several Microsoft’s patents and has threatened to sue developers and users alike over its use. The company’s suit against TomTom in February was the first time it tried to enforce these patents against the Linux platform.
In his post “10 Things Microsoft Did Wrong in 2010,” Joe Wilcox of Betanews observed many of the things Newsweek did and highlighted the departure of key personnel, including the company’s chief financial officer, Chris Lidell, and Don Dodge, its start-up evangelist, who was laid off along with 5,000 other employees in January. Two months later, Dodge took a job with Google.
Is it time for Microsoft to jettison Ballmer?
Mary-Jo Foley, who has followed Microsoft for the last decade, doesn’t think so. Calling the Newsweek prediction “click-bait, pure and simple,” she says she’s 99.99 percent sure it’s “out and out wrong.”
Her reasons:
Ballmer did some good things, too, like firing 5,000 people and cutting costs to please Wall Street, escaped the big mistake of buying Yahoo, and overseeing the release of Windows 7, which was generally well received.
But her biggest reason, it seems, is this: Gates, Ballmer’s buddy, doesn’t want to fire him, and Microsoft has nobody else in-house to replace him anyway. Not exactly a ringing vote of confidence, but if you’re having a bad year-end, I guess it’s better than nothing.
In an interview with the Seattle P-I, Google’s Dodge likened his former company, Microsoft, to IBM in 1985 – losing its innovative edge after 20 years.
Another factor, he says, is Gates’ departure in 2008. “The transition was smooth, but not having Bill there every day has far-reaching implications,” Dogde said.
To Ballmer’s credit, Dodge adds: “Failures are open to debate and I’d rather not talk about them. One thing I will say: Steve Ballmer never gives up. He keeps coming, and coming, and coming. So, anything you might classify as a failure today ... don’t be surprised if they eventually turn it around and make it successful.”
So, what do you think? If he keeps at it, will Ballmer get this leadership thing right one of these days?