Investor calls for Ballmer's head -- but who will replace him?

May 26, 2011

By Woody Leonhard | InfoWorld

Yesterday Greenlight Capital President David Einhorn -- who controls $5 billion of investor money -- tore Steve Ballmer a new aperture. "It's time for Microsoft's board to tell Steve Ballmer, 'All right, we see what you can do, [now] let's give so-and-so a chance.'" One has to wonder which so-and-so Einhorn had in mind.

As of March 31, Greenlight held 9 million shares of Microsoft stock worth about $220 million, or about 0.1 percent of the total. Bill Gates owns 561 million shares and Ballmer owns 333 million shares -- almost 11 percent of the company, or 100 times as many shares as Greenlight -- so a shareholder fight doesn't seem imminent. I think Einhorn has a subtler plan in mind.

Einhorn's pronouncements and explanation won't come as a surprise to anyone who's been watching Microsoft's stock, or its latest corporate machinations.

Microsoft cognoscenti have been calling for Ballmer's resignation for years, with numerous examples cited: the old Vista fiasco; the 2008 Yahoo takeover that didn't go through (billed at the time as a "failure" but now widely accepted as a blessing); laggard Office 2007 sales.

Microsoft's problems piling up
Recently, the problems have just piled up. In the mobile arena, the Kin crashed and burned and took a whole lot of greenbacks along with it. Mango talk and Nokia subversion notwithstanding, Windows Phone 7 embarrassments continue to mount. Just last week, the headlines touted Gartner's estimate that Microsoft had sold 1.6 million Windows Phone 7 devices in the first quarter of this year. Many news outlets soft-played the fact that Gartner also tallied 3.6 million Windows phones sold in the first quarter, leading to the inescapable conclusion that the ancient Windows Mobile 6.x still out-sells Windows Phone 7 by a wide margin.?

Online, Microsoft continues to pour astonishing amounts of money into Bing, buying small improvements in search market share in the US. Earlier this month I wrote about the way Microsoft will spend about $5.5 billion on Bing this year to generate $3 billion in online revenue. Perhaps Ballmer should ditch his Excel developers and grab a calculator.

Then there's the jump to the cloud. We all know Microsoft has to make the leap, but there have been so many public outages -- Hotmail, BPOS, Azure -- and the outages have been handled so poorly, with customer notifications a distant afterthought, that many of us wonder whether SteveB's crew can handle it.

Source: http://www.infoworld.com/t/microsoft-windows/investor-calls-ballmers-head-who-will-replace-him-326?source=rss_infoworld_top_stories_

penguins pittsburgh penguins birmingham weather alabama weather complex white iphone 4 barry soetoro