Steve Ballmer has announced that he will resign as
Since Ballmer took the reins Microsoft shareholders have had a negative total return of nearly 20%, with the stock down 36%, according to data from FactSet. While some of that decline can be attributed to the tech sector’s rapid descent from the heights of the dot-com bubble, Microsoft has frustrated investors for years with its inability to translate a massive cash generation machine into stock market performance.
It's not all Ballmer's fault, by any means, but the announcement has led to Microsoft stock soaring:
Microsoft's shares are up significantly in early trading on Friday following news of CEO Steve Ballmer's impending retirement.
Microsoft's shares were up approximately 8 percent on Friday, landing at more than $35 per share before easing off a bit. As of this writing, Microsoft's shares are up 7.6 percent to $34.86.
Mary Jo Foley has an interesting list of possible internal candidates for the top job:
Oh -- and one more thing. Bill Gates is not coming back. Nope. Not happening. Save your pixels.
Good to get that clear right at the beginning perhaps. While the stock is rising strongly, perhaps it shouldn't be?
Microsoft shares are surging on the news that CEO Steve Ballmer is out of the company.
Before investors get too excited however, they should realize that Microsoft's board isn't changing. And Microsoft's board, along with Ballmer, is going to help pick Ballmer's replacement.
Microsoft's board isn't upset with Ballmer. It isn't forcing him out. We're told the board is in "lockstep" with Ballmer and his vision for Microsoft as a devices and services company.
The way we're interpreting all of that is whoever takes over isn't going to lead some radical remake of the company.
It's going to be more of the same apparently. A bit of history:
Ballmer joined Microsoft in 1980 - five years after it was founded by Bill Gates. He began life at Redmond as the software vendor's first business manager. Twenty years later, he had become CEO of one of the biggest technology corporations in the world.
During his tenure, Ballmer oversaw the development and meteoric rise and spectacular fall of Microsoft's Windows Operating System through its XP golden years, via the laughable Vista and finally ending up with Windows 8 and Surface which has failed to capture the imagination of consumers quite in the way that Big Steve might have hoped.
And a little more history:
Ballmer, 57, met Microsoft founder Bill Gates in 1973 while they were living down a dormitory hall from each other at Harvard University. He joined Microsoft in 1980 to bring some business discipline and salesmanship to a company that had just landed a contract to supply an operating system for a personal computer that
IBM would release in 1981.
Despite the stock soaring on the announcement Ballmer hasn't done all that badly by the standards of a conventional business:
The company has more than tripled revenues and doubled profits under Mr Ballmer's leadership.
The Microsoft announcement is here and Ballmer's letter to Microsofties is here.
I've said a number of times that I think the company could do with a very radical reorganisation. To the point of separating out the XBox and server software businesses and floating them off separately, possibly keeping Windows and Office in a private company. But whether private or public those two areas look to me like they've had their day and the future holds a very profitable decline in store. The way to make the most money out of that being to sweat the products during their decline and return the money to shareholders rather than spend it on attempts to find a new business line.
