updated 11:10 pm EDT, Wed May 25, 2011
Hedge fund exec says Microsoft's Ballmer an anchor
Dissent around Microsoft's leadership became more public Wednesday with a speech from Greenlight Capital manager David Einhorn. The hedge fund operator told those at the Ira Sohn Investment Research Conference Microsoft CEO Steve Ballmer had to "give someone else a chance" at the top spot. He considered the early Microsoft executive the "biggest overhang" on Microsoft's stock because he was mired in traditional behavior.
The criticism isn't new but is coming from a relatively influential source. Einhorn's hedge fund has a relatively large amount of stock in Microsoft compared to others, at 0.11 percent, and could be influential enough that a loss of confidence would lead to a ripple effect among others.
Most attacks against Ballmer have centered on his inability to drive the company's performance outside of its core Windows and Office businesses. In online, where Microsoft is hoping to challenge Google, the company has been willing to lose hundreds of millions of dollars each quarter and has gained search share partly through a deal that has Yahoo using Bing as its search engine.
Mobile has often been cited as the biggest point of failure. Microsoft was one of the earliest to get into smartphones with Pocket PC (later Windows Mobile) and Tablet PC, but it was eclipsed quickly as the BlackBerry, iPhone, and later Android passed it by. Tablets have been a sore point after iPads outsold lifetime Tablet PC numbers in nine months despite Ballmer having most of his decade-long CEO tenure to break Windows tablets out beyond a niche. Windows 7 and Windows Phone 7 have so far proven unsuccessful, even if WP7 has been critically well-received.
A few areas outside of the core have been successful, such as the Xbox line, but both current and former executives have complained that Microsoft under Ballmer is too protective of founder Bill Gates' legacy. Among the accusations have been those of a Apple and IBM have passed it in pure market cap, and Apple has not only passed Microsoft in revenue but now in profit as well despite the lower margins on hardware sales than software.