Ballmer on course to be Microsoft's No. 1 shareholder in 2014

Ballmer on course to be Microsoft's No. 1 shareholder in 2014

Summary: Outgoing Microsoft CEO may become Microsoft's biggest independent shareholder by mid-2014, if current patterns hold.


I'm still digging out from a backlog of holiday reading, but wanted to take a quick moment to point out a couple of articles worth a read by those keeping tabs on Microsoft.


Computerworld's Gregg Keizer did the math and came up with an interesting predictive post on January 5. Keizer noted that while Microsoft Chairman Bill Gates is still the No. 1 independent Microsoft shareholder, he may not be for much longer. At the start of the new year, Gates had about a 25 million share lead on the No. 2 shareholder, outgoing CEO Steve Ballmer. Gates is said to own roughly 4.5 percent of Microsoft's shares, compared to Ballmer's 4 percent.

As Keizer noted, if Gates continues to sell off Microsoft shares at his current pace -- about 20 million shares per quarter -- Ballmer will usurp the spot as the top independent Microsoft shareholder by mid-2014.

Ballmer has made it clear -- in his last official letter to shareholders, in fact -- that he is "an investor who treasures his Microsoft stock."

This is interesting given the reported external agitation to have Gates and Ballmer removed from the Microsoft board of directors. There's no indication this is going to happen. Both of them got the nod to keep their board seats for another year as of the 2013 Microsoft shareholder meeting.

I myself haven't heard from any of my contacts that Gates' and Ballmer's presence on the board is having any kind of a drag on Microsoft appointing its new CEO, in spite of a report to the contrary. I have to say, if a potential Microsoft CEO candidate isn't onboard with Gates and Ballmer being active board members and/or with last year's "One Microsoft" reorg, I don't understand why that person would be interested in the Microsoft CEO job in the first place.


Another piece of potential interest to Microsoft watchers is a December 27 profile of Mark Penn that ran in New York Magazine.

There aren't a whole lot of new revelations in Reid Cherlin's "72 Minutes With Mark Penn" (provocatively subtitled "Breaking down campaign strategy with the former Clinton Svengali turned Microsoft attack dog"). I was interested to read about Penn's Washington DC office, where he and his self-appointed SWAT team seemingly spend quite a bit of time.

The story was interesting to me mostly because Penn doesn't speak to the press a whole lot. He speaks indirectly, of course, through the Microsoft "Scroogled" anti-Google campaign and the new round of iPad-targeted Windows 8 ads. And he mysteriously appears at certain events, like Microsoft's Surface 2 launch in New York last fall (Windows SuperSite's Paul Thurrott and I spotted him in the audience, but he disappeared before either of us went over.)

Even though as of last July, Penn is now Executive Vice President of Advertising and Strategy and a member of Microsoft's Senior Leadership Team, Penn either doesn't want to or isn't encouraged to chat up us press and analyst types.

Penn's negative messaging, as exemplified by the ongoing "Scroogled" campaign isn't for everyone. When I interviewed Ballmer about his legacy late last year, he acknowledged that "the voice we're using in our Scroogled campaign makes some people ... tense, inside the company and outside the company."

"I actually think it's a perfectly reasonable voice for the company to have.  It's not the only voice we should have, but we need different," Ballmer added. Sometimes, "you've got to be humorous.  We were never humorous about that Linux compete stuff, right?  It was never humorous."

Ballmer said Microsoft needs to have different voices for markets where it's a leader vs. where it's a challenger, and that the company has been finding its voice."


Topics: Steve Ballmer: The Exit Interview, Google, Microsoft


Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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  • MS, never take you eye off Google

    I think Gates and Ballmer need to keep a close eye on Google's chairman. I think he is much more passionate about taking down MS on a personal level than Scott McNealy. A lot of the stuff Google does, is simply to take down MS. E.g. when Google over the years released free office and Operating System software repeatedly into the market, it did so at a loss, or at most, a tiny profit. Google doesn't seem to care about making money, whenever it goes after MS' top money making businesses repeatedly. Google just seems to want to take them down. I doubt Google makes money from Android on smartphones. As long as Google gets to throw sand in MS' gears, the company seems to be happy.

    I believe Google's end game is to starve major companies across many sectors, that rely heavily on the Internet, of profits, and then move in and dominate everything, then raise prices and be king of the hill. Given the fact that Google knows everything about everybody, Google will be in a position to cause major hurt if it so chooses.
    P. Douglas
    • Google makes plenty of money

      Go to their investor relations site, should you doubt.

      Google is a publicly traded company, and cannot simply throw money away on a personal vendetta. They need to make money, or as all companies would, face shareholder revolt.

      Google does not make its money in a significant way from user expenditures - it makes it from its huge ad machine and its incredible analytics portfolio. But just because the products are cheap or free, do not make the mistake of thinking they make no money at it. This is how they capitalize the investments they continue to make.
      • That's my boy!

        If Google really wanted to make money, it would exploit almost every opportunity to do so. Instead, it pursues the lucrative OS and office productivity markets with free products, forgoing the potential to make many additional billions of dollars. Google is pursuing a strategy of devaluing products across the spectrum of industries tied heavily to the Internet, while relying on its search / ad network machinery to make money, with which virtually no company can compete. This allows Google to suffocate businesses of profits, while it continues to grow in a way that only it can. It the owners of Standard Oil were around today, they would be blushing with pride.
        P. Douglas
        • Something I learned long ago

          When you make more money than them I think they'll appreciate your advice on how to make money.
          Otherwise your advice sounds silly.
    • I think the paranoia...

      ...which you appear to share, is one of the problems MS needs to get past. The focus for any healthy commercial organization is going to be the customer (the one who pays): his wants, his needs, and how to fulfill them profitably. Under Ballmer and to an extent under Gates, the focus hasn't been on the customer, but on dominance: how to protect MS' dominant position from upstarts like Google, and various Linux distributors; how to keep barriers to entry as high as possible to prevent new challengers from arising, how to keep OEMs, developers, and IT professionals from supporting the competition, and how to exploit MS' dominant position to keep the money coming. The wants and needs of customers have become almost an afterthought. This very attitude is the root cause of MS' legal and public relations problems; not Google, not free software advocates, and not envy.

      MS' challenge is to turn reluctant, resigned, or disaffected customers into enthusiastic ones. I hope it gets started on that soon.
      John L. Ries
      • To put it bluntly...

        ...MS looks to me very much like a political machine that worries a lot more about positioning. strategy, and patronage than it does about the wants and needs of voters.
        John L. Ries
        • that I am starting to agree

          I hope I'm wrong
        • If it is working...

          Then why would they change it just because some people would prefer them to do otherwise?
      • You mean vigilance?

        When you have a competitor who repeatedly pursues two of the markets you make the bulk of your money from, and does all it can to torpedo the value of products in those markets, showing no real desire itself to make money in those markets, you would have to be a fool to ignore it.

        As for the charge of paranoia, you need to work in the intelligence community or law enforcement, and brush over suspicious activity, and see how long you will last. This idea that we live in a world where there is no evil or deception, and we can all run around like little lambs, ignoring things that don't seem kosher, is a formula for disaster.

        “There is no safety for honest men except by believing all possible evil of evil men.” -- Edmund Burke

        "Eternal vigilance is the price of liberty." -- Wendell Phillips
        P. Douglas
        • Competition is not a crime

          Nor is business war. And companies with enthusiastic customers don't need to worry nearly as much about turf protection as ones with apathetic customers do. MS management appears to disagree, but that's a lot of why I stopped non-professional use of MS products in 1995 with no regrets.
          John L. Ries
    • the most dangerous enemy of Microsoft

      is Microsoft. other companies (Google, Apple, Oracle etc) do far less harm to its business, reputation and the future
      • hmm

        Makes you think
    • Maybe it's not just about Microsoft...

      Maybe it's more the type of "the first one is free" strategy that seems to be popular nowadays with software. Kind of like how computers tend to come with Windows, but you eventually have to buy upgrades for them. Or kind of like how Microsoft charged nothing for IE to cut off Netscape's revenue stream, even.

      I do realize that Microsoft would appear to have shown more forbearance in recent years, but a lot of that is probably out of reluctance to be brought before the court again (and again, and again, and again). Obviously, Google should be held under scrutiny, at least to see if some kind of investigation is warranted, but if being "in a position to cause major hurt if it so chooses" is a major concern, Microsoft probably should have been enjoined from implementing WGA or product activation (imagine the harm that could be caused to business and home users if Microsoft decided to spontaneously deactivate Windows en masse, or if a virus caused mass deactivations).
      Third of Five
  • Ballmer on course to be Microsoft's No. 1 shareholder in 2014

    If Steve Ballmer does own more shares than Bill Gates the company is still in good hands. He's done quite a few nice things for Microsoft.
    • Though I hope he too does the "save the world" thing

      that's one thing about Bill Gates which always makes me happy to pay for Microsoft stuff - think about how much of that money goes to good causes.
  • Mark Penn...

    Mark Penn, gee whiz! Couldn't they have found someone with a better sense of humor. My hope for the new CEO is that he/she is less obsessed with Google and more obsessed with Microsoft products and customers.
  • "Scroogled"

    Speaking of "Scroogled" - I hope MS pays royalties to Cory Doctorow for using his meme? Just a thought.
  • Ballmer's MS Stock

    Whatever Ballmer cost MS [$Millions] over his tenure as CEO should be deducted from his MS Preferred Stock Portfolio to offset the loss they have suffered as a result of his stupidity in running the company!
    • If you don't understand risk that's OK

      Without big risk there aren't usually big rewards.

      The fact that he did big bets and lost also highlights that he made big bets and won. That's why Microsoft is still making tons of money.

      I don't have to like Microsoft practices or products to be objective about that fact.
  • In any case...

    It would be nice to see a change in management bring about a less siege-like mentality on the part of Microsoft. Trying to dominate in everything runs the risk making enemies of everyone.

    When Steve Jobs came back to Apple, he declared that the attitude that Microsoft had go lose in order for Apple to win had to be abandoned. For too long, Microsoft's management have been operating under the belief that for themselves to succeed, all others must fail.
    Third of Five