CEO Watch List- Steve Ballmer, Microsoft Update #1

Microsoft MSFT (NASDAQ) and particularly Steve Ballmer, the firm’s CEO, continues to find itself on the hot seat. More and more analysts and tech pundits are beginning to question the firm’s direction and leadership. Yesterday, Kara Swisher of the Wall Street Journal’s All Things Digital examined some of the problems facing Microsoft and it’s chief executive in her piece entitled, What to make of the Microsoft-Is-Falling-And-Can’t-Get-Up Meme. Swisher is by no means in the camp seriously worried about the firm’s immediate future but she suggests there is a real need for some change at the firm. According to Swisher,

Microsoft, as all tech companies do, needs to change, and a lot faster than it has so far; the company has been trying mightily to do so in search and recently, in mobile, where it is woefully far behind; its leadership under Ballmer, who took over from co-founder Bill Gates, has been meh enough to keep its stock moribund.

But, by no means recently–even if there is a better CEO for Microsoft out there than Ballmer–have I found the company execs ignorant about the tougher issues or unwilling to consider changes needed.

In fact, in its high-flying days, Microsoft did have a tin ear to criticism. No longer, and I would call its execs appropriately concerned about fixing its issues, although their efforts do suffer from the company’s massive size and inertia in making the right moves.

Thus, they certainly might not be successful at innovating, although these are the very kinds of problems Apple CEO Steve Jobs solved when he returned to a rotten company in what, in its current glory days, seems eons ago.

And Microsoft has been getting the same questions that are beginning to be asked about Google.

… That’s why–at this point–I can see no need for panic to set in about Microsoft…

… As for today, even though we are all terminal, the sky looks like it will remain intact at Microsoft for a little bit longer.

Swisher is rather pragmatic about Microsoft’s situation but pragmatism does not always reign particularly when you are talking about one of the largest and formerly most successful tech firms in history. Keep a close eye on Ballmer and Microsoft.

CEO Watch List- Steve Ballmer, Microsoft

I have resisted putting Steve Ballmer, Microsoft’s MSFT (NASDAQ) CEO, on the Liberum CEO Watch List for sometime now. Ballmer’s ongoing startling statements about Microsoft and the industry along with his lack of innovation over the last number of years has begun to be examined by a number of specialists in the field. Rumors even are heard about bringing Bill Gates back. While it is hard to believe Ballmer is really at risk, maybe he should be. Just today, Adam Lashinsky, the Senior Editor for Fortune wrote a piece in which he said,

He (Ballmer) is presiding over the umpteenth reorganization of the company he has run for years, having succeeded his pal, Bill Gates. His online business, whose Bing search engine is making modest gains against industry leader Google, lost more than $700 million last quarter.

Yet here was Ballmer traveling down a semantical rabbit hole over the future of the PCs. In Ballmerworld, it doesn’t matter that the PC is shrinking in relevance. Any device is a computer, and people will want to use Windows because they’re so familiar with it. By the way, Windows 7, Microsoft’s latest release, is crushing it, further proof that computer users love Microsoft.

CEOs certainly are paid to put on a happy face and represent as well as possible. But hearing Ballmer at the Wall Street Journal’s D conference left me with one question: What is the guy smoking? Windows 7 has been a “success” in part because Microsoft’s previous effort, Vista, was such a stinker. Businesses the world over held off so long on upgrading their PCs that once Microsoft got it right they had no choice but to start replacing obsolete equipment.Semantics aside, Ballmer knows as well as anyone that the future of personal-computer industry is in mobile devices. Here, Microsoft’s hand is so weak that its most important global equipment partner, Hewlett-Packard (HPQ), is buying a beleaguered smartphone maker, Palm (PALM), for its superior mobile operating system.

Ballmer really needs to show he understands his marketplace and his competition and how he expects to deal with it. So far, in this regard he has been a dismal failure. Under his tutelage the stock has not really shown much shine either.Stay tuned.

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Silicon Alley - Meet The New CEO Of Microsoft

Microsoft's Loses Another Top Executive

As Microsoft's MSFT (NASDAQ) Web plans continue to flounder (Yahoo, search, etc.,) more complications have  appeared.  The primary person behind Microsoft's efforts to acquire Yahoo, Kevin Johnson, The Platforms and Services Division President will be leaving after sixteen years to become Juniper Networks JNPR (NASDAQ) new CEO.  Was he pushed or did he jump?  According to Zachary Rodgers of ClickZ Network,

Johnson may have taken the fall for Microsoft's unsuccessful (to date) exertions to acquire Yahoo. The Wall Street Journal reported late yesterday that CEO Ballmer has grown increasingly frustrated with his own senior executive management's maneuverings throughout the negotiation process, and Kevin Johnson has been fingered as a major shaker in that process.

According to Kara Swisher of the Wall Street Journal's All Things Digital,

As the president of its Platforms and Services Division, the smooth Johnson has been trying, without much success, to beef up the software giant’s efforts in the Web space, especially in the online advertising arena.

He and Microsoft have had a little problem with that, largely due to an immovable object called Google. 

In an attempt to make an end run around the search behemoth, Johnson led Microsoft’s attempt to take over Yahoo, the #2 player in the search and search advertising space.

The six-month effort, according to many sources at Microsoft, has led to a great deal of unrest at the company, including ire aimed directly at Johnson because of his perceived influence on CEO Steve Ballmer.

With Johnson's departure, Steve Ballmer, Microsoft's CEO, announced a new reorganization of the Windows and Online Services Divisions (see press release for details).  The Online Services division will now stand on its own.  According to the release,

Effective immediately, senior vice presidents Steven Sinofsky, Jon DeVaan and Bill Veghte will report directly to Ballmer to lead Windows/Windows Live...

In the Online Services Business, Microsoft will create a new senior lead position and will conduct a search ... In the meantime, Senior Vice President Satya Nadella will continue to lead Microsoft’s search, MSN and ad platform engineering efforts...

In addition, Senior Vice President Brian McAndrews will continue to lead the Advertiser & Publisher Solutions Group (APS)...  McAndrews will continue to focus on the display advertising opportunity for Microsoft, driving execution and integration of advertising assets, including recent acquisitions such as Massive Inc., Navic Networks, ScreenTonic SA and YaData Ltd.

Microsoft has been looking rather anemic of late.  We will just have to see how this all plays out.  Speculation is already beginning to appear as to who will replace Johnson at Microsoft.  Kevin Liu of Reuters wrote piece in which Jon Miller, the former AOL executive and a possible Icahn candidate to replace Jerry Yang at Yahoo should he ultimately prevail, might be considered for Johnson's former job.  Whatever the choice for now, Google must be singing a happy tune. 

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Silicon Alley Insider

PC Pro

Barron's Blog

CNN Money

Guardian

Seeking Alpha

CEO Watch - Jerry Yang, Yahoo

The rumors are beginning to fly now that Microsoft has walked away from Yahoo. Today Zachary Kouwe wrote a piece in the NY Post entitled, Investors May Yank Yang, Filo over Dough. According to the story,

Several hedge funds with large positions in Yahoo! have written letters to the board and to Yahoo! President Sue Decker explaining their displeasure at how Microsoft's hostile offer was mishandled, sources close to the funds said.

Shareholders are particularly irked that Yang and co-founder David Filo negotiated with Microsoft last weekend without any representative from the board or their advisers.

The dance is probably not over with Microsoft. For now, Yang will need to find ways to convince shareholders Yahoo can turn itself around, a tall order. According to an AP story on MSNBC Yang is still open to working out a deal with Microsoft.

If Microsoft returned with a “real offer and a real proposal,” Yang said, “we would be happy to listen.”

Yang figures to get an earful from irate shareholders at the annual meeting. Yahoo finally set the meeting for July 3 after indefinitely postponing it in early spring as part of its effort to foil a possible hostile takeover attempt by Microsoft.

Now it may be Yahoo’s shareholders who try to oust Yang and the rest of Yahoo’s board instead of Ballmer, who had threatened an attempt to dump the 10 directors if they didn’t accept Microsoft’s offer.

Reuters Deal Zone quotes The New York Times and Wall Street Journal,

“I am extremely angry at Jerry Yang and at the so-called independent board,” Crawford told the Times. ”I’m hoping that there is such an outpouring of outrage that the board is embarrassed into revisiting this thing … but I’m not optimistic about that.”

I don't think Yang is on the way out but we will just have to wait and see how this all plays out.

For more:

International Herald Tribune
Newsfactor

CEO Watch - Steve Ballmer, Microsoft, Update 1

Could last week's story on Ballmer's fate actually have legs?  Microsoft's withdrawal from the Yahoo takeover might put a bit more pressure on Ballmer.  Yesterday Valleywag put out a piece questioning his long-term status.  I remain skeptical but if interested check the story.

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Bloomberg

Techconfidential

TechObserver Portfolio.com

Newsweek

The Globe and Mail

CEO Watch - Steve Ballmer, Microsoft?

Steve Ballmer, the larger than life CEO of Microsoft who is frequently seen ranting and yelling in his presentations, recently was the focus of a Wired story.  Wired has raised the question whether Ballmer might be at risk for his position.  While the supposition might seem far fetched at this moment, Wired talks about the troubles surrounding Microsoft's launch of Vista as well as the ongoing fight to acquire Yahoo.  There is some merit to the idea but it is very unlikely.  Just yesterday Mary Jo Foley on CNET's blog wrote a short piece in which she tried to examine who Microsoft could turn to should Ballmer go.

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Fortune