by Peter Lauria Info
Peter Lauria is senior correspondent covering business, media, and entertainment for The Daily Beast. He previously covered music, movies, television, cable, radio, and corporate media as a business reporter for The New York Post. His work has also appeared in Avenue, Blender, and Media Magazine, and he’s appeared on CNBC, Bloomberg, BBC Radio, and Reuters TV.
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Bill Gates & Steve Ballmer (Corbis) Senior Microsoft executives, disenchanted with the company's stagnant stock, have been secretly discussing how to kick Chief Steve Ballmer, and maybe the board, to the curb.
An emotional tribute to his 30 years of service nearly brought Microsoft's testosterone-fueled CEO Steve Ballmer to tears yesterday in front of more than 10,000 employees gathered in Atlanta for the software giant's annual global sales meeting.
"He was rendered completely speechless," a tweet from one of the conference's attendees reported. "Incredibly intense and moving experience."
According to another Microsoft executive at the conference, there may be a reason for the drama other than gratitude: Ballmer may not be at Microsoft when next year's event rolls around.
"It felt like it could have been a sign of his last mgx [Microsoft Global Experience]," wrote this insider in a text message to me. "A farewell?"
Indeed, this executive and several other sources close to Microsoft say that there is growing resentment among a faction of certain executives inside the company who blame Ballmer for the years-long stagnation in Microsoft's stock price. Their argument, according to these sources, is that Microsoft's overall financial performance has been solid—analysts expect the company to show continued earnings improvement when it reports second-quarter results today. It has scored some strategic wins with the Yahoo search deal, Xbox, and Windows 7 release, and is sitting on a cash pile of more than $20 billion. But instead of a steadily rising stock price, Microsoft shares have fluctuated wildly over the last few yers, seemingly unable to break out of the mid-$20s for any significant length of time.
After what Citigroup analyst Walter Pritchard dubbed an "in-line or better" first quarter, for instance, Microsoft shares traded down 9 percent. The company's shares started the year at $30.67 and have since dipped to $25.12 to close trading yesterday.
Sources say the talk around Microsoft's Redmond, Washington, headquarters—which has grown increasingly louder ever since Apple surpassed Microsoft in market capitalization--is that the company's stock suffers from a "Ballmer discount," and that the CEO is on the clock to significantly move the needle on its share price over the next two or three quarters or face a potential move to oust him.
"Ballmer is on the list of mega-executives under pressure," says a banker who has negotiated deals for Microsoft. "If he was asked to leave the building, I suspect there would be more happy than unhappy people."
A representative for Microsoft, citing a quiet period ahead of today's earnings call, declined to comment for this story.
One option secretly being discussed among the disenchanted is to add board seats or replace current directors at the end of their term with CEO-ready candidates.
Ballmer still enjoys strong support from many executives inside Microsoft and among those who do business with the company, and several sources dismissed the notion of his ouster as little more than wishful thinking among a disenchanted but vocal minority within an organization that employees nearly 100,000 people.
Under Ballmer's watch, Microsoft's revenue swelled from $23 billion when he took over in 2000 to $54 billion today. Earnings have grown to $14.6 billion from $9.4 billion. The company still dominates the PC market, consumers have sided with the Xbox in the console gaming wars, and its Bing search engine is slowly gaining traction with users. And Ballmer has managed costs aggressively, particularly during the recession, which Wall Street analysts love to see.
There are also two powerful intangibles that will make it difficult for any group, however sizable, to remove Ballmer: Microsoft's board supports him unwaveringly, and there's no obvious successor that could easily slide into his post.
12 July 21, 2010 | 10:47pm Twitter Emails
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Ok, MS bullied its way into prominence without any decent product to back it up. Its basic products are horrible,they crash all the time, they have so many bugs in them that it is impossible to name them all in this email, you are constantly having to update files (new 'security fixes'), etc, etc, etc. bottom line ....their products suck!!!! and now you consider that their products (office, etc) are becoming completely irrelevant in the way the computer market is going, and the fact that they don't seem to be able to come up with any new, truly innovative ideas or new products. so what do you have ... a poorly performing dinosaur. and what happens to poorly performing dinosaurs? they become extinct. and given all the frustration that ms has caused people with their inept quality control, i will be glad to see them go!!!
With all their vast wealth, they have no style, Can't seem to offer a good product. They are dorks. Next to an Apple iMac, a PC running windows looks like something from the basement of a serial killer.
I am amazed at some of Microsoft's poor decisions. I have used their products since Word came out under DOS. I had become pretty good at using their Windoze products, because they at least had some logic to their menu layouts, you could customize them, etc. Then they came out with Office 2007, with its idiotic "button bar", and I have to hunt for every command I use beyond cut, copy, and paste. I get a headache when I use the product, but our IT people forced it on us. You cannot switch it back to the old interface, of course. What would make a company antagonize their user base like this? Such a huge change to their flagship product had to have been approved by Ballmer. Maybe he should go back to screaming and sweating onstage.
Microsoft since the 2003 era has made some terrible me-too UI decisions. I am deeply disturbed that you cannot use an option to opt out of ribbon, I dislike most of the UI changes, and dont understand why Microsoft is willing to cause significant productivity loss with trivial UI changes in an effort to modernize or make the UI snazzy. I strongly disagree with this, and with the loss of the classic menu systems. I think Microsoft needs to listen to IT people and to long time users who are actually productive rather than idiot-level focus groups that want a ribbon bar that takes up a fifth to an eighth of the screen depending on the desktop size.
Must not be too secret.
In the 40-odd years I spent in technology, a second meeting with Balmer is something to be avoided at all costs... Because if you can't, and even if you live close to M/S campus in Redmond, a meeting on ANY subject with this guy was ALWAYS LIKE THE WORST DENTAL PROCEDURE you've ever had - ever.. The guy is a pompous, elf-centered, ego manic.. A coup would be fun to watch...
Microsoft software is pure crap. IMO. It has made millions of nice people's lives a daily hell all across this great country and the world.
...And a security nightmare for individuals, companies and governments for an eternity to come. The only benefactors have been MS owners/employees and all the East Europeans and Chinese hacking into U.S. bank accounts, federal agencies, and the Pentagon. There was, of course, an alternative back in the day. The world is stuck with MS now because corporations and the federal govt. went with cheapo bloated IBM contracts and cheapo bloated Microsoft, instead of paying a little more to get a lot more with ... wait for it ... Apple.
Apple is a consumer products company and is quite successful at it. Why change? They use computer's in their products but these are NOT their products. I suspect that if some person from "Government Acquisitions" went an tried to buy computers from Apple at the same deep discount rates that that person could get from a person selling PCs he would get a polite "Thank you but we're an electronics 'boutique retailer'. We can't fill your order. "
Microsoft mantra since the beginning was "A computer on every desktop." It became a convicted monopolist, buggering an beggaring the whole industry, its "partners," in the process of achieving that mantra. Now its is reaping what it sowed; nobody in the PC production environment is willing or even able to run any risk or expense on innovation. That's why there are less than twenty chassis manufacturers left in the world. That's why PC still ship with PS2 keyboard and mouse ports when Apple did away with them and switched to USB in 1996. Those few PC manufacturers left and run by accountants and on their P&L statements innovation is an expendable expense That's the direct result of Microsoft's commoditization of the PC, They've got nobody left to feed to the wolves. "A computer on every desktop" but ONLY there.
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