Every so often, the debate resurfaces as to whether Microsoft could or should be better off if the company were broken into two or three mini-Microsofts.
This week, thanks to a new Goldman Sachs report which is putting a hurt on Microsoft's stock price, the issue has come to the fore again. Goldman Sachs has downgraded Microsoft to "neutral" from "buy" and analyst Sarah Friar has proposed a three-pronged plan to "unlock value" in Microsoft shares.
As some others have noted, Friar's plan includes a couple of ... fanciful... ideas, such as "become a cloud leader." (Boom! You're now a cloud leader, said the genie!) One of her ideas, however, is not quite so far-fetched. What about "divesting more peripheral assets such as gaming," Friar suggests.
There have been as many different proposals for splitting up Microsoft as proposers of the concept. Split the company along Windows/Office lines was a favorite of at least one antitrust judge. How about an enterprise/consumer split? What about a consumer/enterprise/services break-up? Or a three-way split between Windows, Office and search?
Just last week, CEO Steve Ballmer named three new presidents. Instead of having a single president running both mobile and gaming, Ballmer opted to name two different presidents to head those units (even though mobile and gaming will continue to report as a single profit-and-loss center when the company details its earnings).
It's been a long time since gaming was seen as an afterthought by Microsoft or those watching the company. In fact, Microsoft seems to be trying to tie in ever more tightly its Xbox Live gaming service into its mobile communications business with its heavy focus on gaming with Windows Phone 7. Microsoft execs continue to play up the coming Kinect sensors' appeal beyond gaming, claiming that Kinect is indicative of the company's broader natural-user-interface direction. And Microsoft, like Google and other tech leaders, seems to think social gaming will be the next big thing, and no doubt sees plenty of potential search/ad synergies in that space.
Based on these trends, I have to say I don't see the Softies thinking about spinning off its Interactive Entertainment unit under Don Mattrick any time soon.
Would more mini-Microsofts be more profitable, more focused and more responsive? Can you see Microsoft's CEO voluntarily splitting the company up into "Baby Ballmers" any time soon?