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Some top investors and former employees are calling for Microsoft CEO Steve Ballmer's resignation.   (Source: Reuters)

IBM on Tuesday past Microsoft in market cap for the first time in decades. Some perceive Microsoft as a "dying" brand.  (Source: Silicon Angle)
No more "Developers, developers, developers"? Top investors demand Ballmer step down

Microsoft Corp. (MSFT) Chief Executive Steve Ballmer has always had his critics.  His hard-nosed style of management offended some, as did his colorful personality.  But criticism of the CEO, who replaced Bill Gates in 2000 for the position, has been mounting of late as the company has struggled in certain sectors -- like smartphones and tablets -- and made questionable decisions, as well -- like purchasing video messaging service Skype at nearly twice its market valuation.

At a financial summit -- the Ira Sohn Investment Research Conference -- in New York on Wednesday, David Einhorn, an influential hedge fund star and manager of a fund at Greenlight Capital, delivered harsh words for Microsoft's boisterous chief.

He commented, "[G]ive someone else a chance.   His [Ballmer's] continued presence is the biggest overhang on Microsoft's stock."

Mr. Einhorn has vested interest in the company's success.  He recently executed a large purchase of the company's stock.  His firm now owns 9 million shares, or about 0.11 percent of the company's total shares.

While some properties like the Xbox console and the Windows 7 operating system have been well received and sold great, investors have largely focused on the company's misses.  CNN Money last year carried a scathing editorial in which it suggested that Microsoft was "dying".

With stock worth under 10 times the company's earnings, Microsoft shares are considered undervalued.  But not everyone is purchasing due to the cloud of doubts hanging over the company.

Last year Microsoft was notably passed in market cap by a familiar old foe -- Apple, Inc. (AAPL).  While many jeered at this news, Apple has since somewhat silenced critics by passing Microsoft on quarterly profits.  On Tuesday further concerns were raised when lumbering old giant International Business Machines Corp. (IBM) passed Microsoft in market cap for the first time in decades.

After years on top of the tech industry in stock, revenue, and profits, Microsoft is finding itself fading from the race.  Does that require a major leadership shift?  Some argue that it does.



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RE: Problem
By robinthakur on 5/31/2011 11:32:04 AM , Rating: 2
Microsoft's Server products are fantastic and rightfully sell by the truck load. If you look at the Windows Phone 7 development suite, it is likewise brilliantly executed, so the problem is that MS is not properly communicating this to their target market or their target market has already stopped listening.

What MS really falls down on is the consumer market or anything where they market direct to the consumer. Even the Xbox (a rare hit) is more its own brand than a bona-fide MS brand. The danger is that the brand becomes toxic to consumers due to too many failures and the feeling that MS is not innovating anymore, they are following and that other companies can do the same things better and more appealingly.

Again, the true problem here is not today, it is 5 years in the future as their market share is eroded, most probably because the vast majority of their public traditional customers transition to devices which don't run windows/office etc. Microsoft desperately need a clear vision in this arena or they are simply acting defensively and burning money for no return. The first thing they should do is develop Office (and SharePoint integration) for other Operating Systems or market their own OS's with that integration far more persuasively. Whining that "people like the OS once they use it" does not explain the poor sales or the fact that so few people are even willing to try it.


"Well, there may be a reason why they call them 'Mac' trucks! Windows machines will not be trucks." -- Microsoft CEO Steve Ballmer














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