Steve Ballmer's defining hour

Steve Ballmer's defining hour

Summary: Whether Microsoft ponies up more cash for Yahoo, walks away or launches a proxy war it will be CEO Steve Ballmer's defining hour.Ballmer addressed his troops in a town hall broadcast Thursday (Techmeme) that was attended for a bit by Silicon Alley Insider's Henry Blodget.


Whether Microsoft ponies up more cash for Yahoo, walks away or launches a proxy war it will be CEO Steve Ballmer's defining hour.

Ballmer addressed his troops in a town hall broadcast Thursday (Techmeme) that was attended for a bit by Silicon Alley Insider's Henry Blodget. The bottom line: Microsoft has nothing to announce today regarding its bid for Yahoo, but will in "very short order." Ballmer's key quote via Blodget:

We are absolutely 100% determined to build the most interesting position in the world in online advertising media and the kind of social connected social media experience. The future of the way people consume information is going to change in the next 10 years dramatically. We are absolutely committed to being the leading player. We are not today the leading player.

Update: Ballmer told The Wall Street Journal in an interview that Yahoo could give Microsoft the online advertising scale it covets, but also added that the software giant could go it alone if it had to. Nevertheless, it appears that Microsoft will go hostile and launch a proxy war. Ballmer argued that Microsoft had the technology, but not the scale and position to be a player in online advertising.

But making Microsoft that player is a management hurdle second to none. Meanwhile, it's not clear whether Yahoo is a miracle cure. Win or lose Yahoo, however, we're on the cusp of the most important chapter in Ballmer's career. What he decides is likely to define him.

Let's ponder the moving parts confronting Ballmer:

Vista is becoming a perception crisis for Microsoft. When Ed Bott has a series on how to fix--or at least cope with Vista--you know this OS isn't so hot. Why should this thing need so much fixing? Meanwhile, there's a growing chorus of folks that criticize Vista. And to make matters worse Vista's biggest competition is XP--its predecessor. From a management perspective it could make more sense for Ballmer to focus on Microsoft's core businesses. After all, if the core rots the rest of the company quickly follows. Vista hasn't turned into a huge problem for Microsoft yet, but when Wall Street is questioning execs about the mix between Vista vs. XP you have the makings of some serious issues--especially when I could theoretically simply wait for Windows 7.

Multifront wars are dangerous. Let's recap the markets Microsoft has gone after. Search, online advertising, video games, consumer electronics and probably a few more I'm forgetting. You can be the best manager on the planet, but no one can keep every ball up in the air.

How do you rally 100,000 people (assuming Ballmer lands Yahoo)? Microsoft has morale issues today--employees aren't so sure about the Yahoo bid--and it will have them tomorrow even if it lands Yahoo. How will Microsoft keep Yahoo employees from walking? How will it allay concerns that current employees aren't second class citizens? How will Microsoft bridge two cultures? Ultimately Ballmer will have to perform a few cultural gymnastics to integrate Yahoo.

Is Yahoo really the fix? Microsoft gets scale in search and online advertising, but couldn't its dollars be deployed elsewhere. Is scale more important than the management issues that will determine whether any merger works?

It's Ballmer's show. The pressure must be intense.

Topics: Software, Microsoft, Operating Systems, Windows, Social Enterprise

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  • Half hearted approach to world domination

    One real world picture of Bill writing an OS.
    • Steve's defining hour was Monkey Boy 1

      This is just business as usual on a more desperate scale.
    • Good Riddance

      Walk away from Yahoo, walk away from computers. Ballmer's ball game is over.
      Web Smart
  • and you forgot the enterprise CIO

    the cash cow that MS has long milked is not happy about product quality, pricing compared to consumer markets, bunch of other areas. And sees little payback from the Yahoo investment. For too long MS has taken that market for granted ..MS seems to have forgotten that market is not dead with SaaS, virtualization, enterprise search etc
  • Let's face facts....

    This guy is probably one of the worst CEOs in the Fortune 500. The Internet will NEVER be a money maker for these guys. They have flushed hundreds of millions of dollars down the proverbial toilet on chasing Internet commerce. I mean, to even read this fool's speech is LOL out funny. "Social connected social media experience"? What does this even mean? Hey Steve, why not go take your money and streamline your business. Read Jim Collins's "Good to Great" or something and learn how to run a business instead of pretending you have any shot at all to move beyond your shovel-ware OS and bloat-ware Office suite.
    Mike Cox
    • Shovel-ware

      Nice phrase, Hadn't heard that one.

      I had the complete misfortune of building a W2003 Server with IIS, PHP and MySQL on a PowerEdge 2950 just recently.

      After an initial phase of vomiting, I did the build and looked up installing PHP as ISAPI.

      Instructions on the MS site were more marketing material than anything useful. "Now you will get a leaner, more reliable and secure system." "With new faster security updates" "Helping you do more for less".

      Nothing changes.
    • Ouch!

      I agree, but I never expected to see such a harsh statement from Mike Cox.
      John L. Ries
    • Double ouch -- 10

      [i]Social connected social media experience[/i]

      That's a good one!
    • And the mask slips, if ever so briefly...

      I'm guessing your rep gave you a case of substandard Cuban cigars, thus driving you to apoplexy. :-)

      Unfortunately, Steve-O can't streamline his business. He HAS to get into online commerce, there's no way MS survives the next 20 years without it. They have already flushed hundreds of millions of dollars down the toilet, but their next act is even better. Now they'll flush BILLIONS! The WOW starts now, so to speak.
    • Do not be surprised!!

      To all who are concerned about Mike Cox' passionate statement regarding these not be surprised or confused - it is a sign of the times! Mike is seeing an executive squander what has been the greatest franchise on earth...a once-proud company is endangering all who put their trust in it. Dinner at Yarrow's is not cheap. It has always been a sign that you were doing well, and you need to be able to take prospective clients there. With a purchase of this size...there is almost absolute certainty that...ahem...headquarters will not be able to channel that money to...ahem..."certified partners"! Is it not well within Mike's rights to be concerned?! Should we not all be there for our brother, in the hard times as well as the good?! Let us rally about him and show support!!
      • 9.5

        I'm sure Mike thanks you for your support.
        John L. Ries
    • The end is near!!! The end is near!!!

      Wow! If Mikey's making such negative comments about the geek-in-chief, you gotta know that the end of the world is coming soon!

      Either that or he has a bad tummy ache.
      • Maybe....

        ...his wife got him deprogrammed.

        Seriously, Mike does make serious posts from time to time, but this is only the second I've ever seen on the subject of MS. Apparently, Ballmer's not even worth satirizing any more.
        John L. Ries
    • Where is his REP !???

      He's obviously been gagged and bound, forced to speak snake tongue, and in dire need of rep support! Hold on Mikey, he's bound to be there soon. In the meantime, TRY TO GAG YOURSELF! You'll thank me later for the sage advice.

      Where is a Ballmer Borg when you need one?
    • DUDE!!!!!!!!!!

      In a world without wall and fences , who needs windows and gates ?
  • Yahoo isn't going to "define" Ballmer...

    That's already been done by his years as head thug of the nastiest, greediest, corporate predator of the last twenty years. Yahoo isn't even a blip on the scope compared to his efforts at ruining competitors, monopolistic extortion, and legal dirty tricks.
    Henry Miller
    • Maybe it will not define him, but, it is certainly one of the most

      important decisions he will make if not the most important. And, it comes at the most critical time in his tenure. They have never had so many threats.
    • Americans don't read...

      Hear, hear to that one... but realise that like oil corporations, Microsoft has become an annex of US Foreign Policy, with a focus towards global supremacy on every level. Forget the DoJ, Microsoft have a mandate to do as they choose.

      I thought American citizens had an excuse until I found that Zbigniew Brzezinski's "The Grand Chessboard" was freely available in US book stores. To paraphrase Cheney, "We can do anything we like, Americans don't read..."
      David Gale
      • Americans don't read...

        Yes, and I DID know that Cheney was quoting Allen Dulles (career spy, Wall Street lawyer, CIA Director)
        David Gale
    • You gotta read between tthe lines...

      [i]"Yahoo isn't going to "define" Ballmer...
      That's already been done by his years as head thug of the nastiest, greediest, corporate predator of the last twenty years. Yahoo isn't even a blip on the scope compared to his efforts at ruining competitors, monopolistic extortion, and legal dirty tricks."[/i]

      You gotta read between tthe lines on this yahoo deal... Yahoo is merely the set up for the defining moment ( that is about to come ) that Ballmer is looking for. He is simply positioning his players as part of a bigger and far more sinister strategy... Silverlight...

      Microsoft needs Yahoo to distribute and con the world into beta testing Silverlight for them. And they have to do it before the Olympics as that is the final cog in the distribution wheel.

      Yahoo has the traffic and exposure Microsoft needs. Once they aquire Yahoo, you will see all of the media content switch to silverlight, forcing thos who are dumb enough to still be duped into being beta testers into installing Silverlight and debugging it for free... Thus fluffing the adoption stats on it. They will make it look as attractive as possible at first.. Try to integrate it into as much as possible and as fast as possible. They will practically giving it away.

      And once the masses are hooked and businesses are invested, watch out...

      Microsoft is trying to follow the neighborhood drug dealer business model and silverlight is their latest designer drug. Hook the kiddies and then start squeezing them for as much juice as you can get. Force business to run windows servers in order to get all the proprietary perks and desirable interface controls for Silverlight. Squeeze from every direction possible. If the world adopts Silverlight and dot net... ohhh.. then microsoft might just have some vested masses by the short and curlies...

      Too Little... Too Late...

      MS is behind it.. it will fail miserably...