Steve Ballmer's Idiocy- "Pondering Change" at Microsoft

Friday's Wall Street Journal ran a rather curious article concerning Microsoft, entitled "Ballmer Ponders Changes at Microsoft."

The piece begins,

"As Bill Gates ends three decades in Microsoft Corp.'s top management, Chief Executive Steve Ballmer faces a major question: How do you make a 100,000-employee software giant much more agile?

There are no easy answers. But in a memo last summer to his top lieutenants, Mr. Ballmer drew lessons from two other U.S. business icons -- Wal-Mart Stores Inc., known for the central management of its retail outlets, and General Electric Co., known for businesses that operate autonomously. His conclusion: Microsoft needs more elements of both."

This is a joke. Ballmer is a pompous fool.

The nearby Yahoo-sourced price chart for Microsoft and the S&P500 Index tell a very clear story.

After an astounding performance for shareholders from its IPO in 1986 to 2000, the company has simply declined, then stalled for the last eight years.

Eight years.

Isn't it a little late for Ballmer to wonder what's gone wrong? Where were he and Bill in, oh, say 2002? After the stock price was falling through the floor much faster than the index.

The Journal article continues by noting,

"At the center of Mr. Ballmer's dilemma is ongoing tension over whether Microsoft's huge business divisions should have wide freedom to set their own course -- or be more centrally planned, a strategy that could meld expertise across the company in ways that provide an advantage over rivals with narrower technology portfolios. In the memo, according to Microsoft executives, Mr. Ballmer cites lessons from both the Wal-Mart and GE experiences.

"We're not a conglomerate, but we're not a monolithic operating company," Mr. Ballmer said in a recent interview. "The question is, 'are we always hitting the right balance?'" "

Let's humor Mr. Ballmer. After all, did he not also leave Harvard prior to completing his degree? No matter. Neither he, nor Gates have any sort of disciplined management education, and it shows in the way their company simply stopped performing after 15 years.

Here's another Yahoo-sourced price chart. This time, it depicts the past five year performances of Microsoft, the S&P500 Index, and Ballmer's choice of role models, Wal-Mart and GE.

It's just pathetic, isn't it? Not one of the three firms has managed to outperform the index at all for five years, nevermind doing it consistently.

Give Ballmer credit for knowing how to choose two other turkeys with which to compare his company.

I'm not going to go searching for contrary examples, but I think we all know that Google looks a hell of a lot better than any of these three firms.

My point is, Ballmer is missing the point!

As recently as in this post from earlier this month, I again called for Microsoft's breakup, as I first did in May of 2006. You can read through the many posts I've written about Microsoft to see how I have argued for its divestiture of the company's operations into four independent businesses: operating systems, desktop applications, online, and gaming.

GE has the same problems, and has been under fire for over a year now to be broken up, too. My posts on GE are now somewhat well-known for this view, only way before it became popular last year.

Wal-Mart is simply a retailer which has pretty much saturated its primary markets, and failed in its attempt to move upmarket. It is only doing better lately as the recent slowing of economic growth has brought some of its former customers back from stores like Target and Kohls.

However, the key point is that Ballmer chose, for companies to emulate, two other losers.

If that doesn't tell you all you need to know about Ballmer's and Microsoft's probable future performance, I don't know what else will.