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Ballmer's biggest flop to date

No, I'm not going to say Vista. I see Vista as an organizational failure. Ballmer gets his share of the blame, but there's plenty of blame to go around. Now, Microhoo, the failed attempt to buy out Yahoo -- that heaping pile lands directly on Ballmer's doorstep.

Let me walk you through it. First, as we all know, Microsoft has been obsessed by Google. Ballmer is convinced that Google is The Enemy.

I've never quite understood this. Yes, in general terms, Google is the one technology company that Microsoft hasn't been able to beat into the ground. So what? Microsoft makes its billions from selling software. Google makes it mint from online advertising and the search engine that powers it.

Certainly, as the years have rolled by, Microsoft has tried to storm into Google's search stronghold. They've failed. It won't be the first or last time that Microsoft moved out of its comfort zone and into the twilight zone.

Google, in its turn, has advanced into Microsoft territory with Google Apps. That's a more serious threat. I think online office suites will never completely break office suites that live on PCs. After all do you really want your important report's very creation to depend entirely on your Starbucks Wi-Fi connection? I don't. Google Apps is no Microsoft Office killer.

Besides, Microsoft can play the online office suite again. OK so their efforts with their slew of different fill-in-the-blank Live services to become a Web 2.0 contender hasn't really gone on anywhere. Still, with its most recent attempt to create an all in one SMB online office service package, Albany, Microsoft may actually have something customers will want.

But, instead of competing and beating Google, Ballmer had to make a grandstand play. He had to take Google head-on by buying Google's closest competitor. Would it have worked? I don't know. I can argue both sides of whether Microhoo would have worked for Microsoft.

What we do know is that, the data suggests that when you put two declining search engines together, you're not really going to be hurting Google much.

That's water over the dam now. What's important isn't whether it would have worked or not -- we'll never know now -- it's that Ballmer couldn't get the deal made. Ballmer said, at the time, May 3rd, "After careful consideration, we believe the economics demanded by Yahoo do not make sense for us, and it is in the best interests of Microsoft stockholders, employees and other stakeholders to withdraw our proposal."

So, of course, what did he do? Ballmer kept trying, and failing, anyway to close the deal. Finally, Ballmer's last efforts came to nothing on June 12th. Ballmer's last ditch effort to buy Yahoo has failed. Oh, and Ballmer's moronic joke of trying to buy Yahoo's search engine without the rest of the company -- isn't that kind of like saying you want to buy a car except you don't want the hubcaps? -- came to nothing.

Finally adding salt to Microsoft's self-inflicted wounds, what was the final result of Ballmer's ham-handed attempt to pull off Microsoft's biggest acquisition? Why, Ballmer made Google stronger than ever by driving Yahoo into a Google ad-sales alliance.

Good going Ballmer! He not only can't hurt Google, he actually makes them stronger! It's enough to make me wonder if maybe Ballmer has some kind of corporate death wish. Maybe Ballmer wants to be fired?

 

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What People Are Saying

This is way off topic. Why

This is way off topic. Why do you have a hyphenated last name? I'm trying to read your blog but can't get past the last name thing. Sorry.

Hyphenated last names

I can't quite decide if you were trying to make some kind of lame joke but couldn't find a punchline, or if you are simply a moron.

Since there is nothing inherently funny about hyphenated last names, I'll simply have to assume you're a moron.

It's Yang's flop...

It's silly to blame Ballmer, for Yang's decision to destroy Yahoo shareholder value, rather than to accept any deal with Microsoft.

As Yahoo investor Mark Nelson / Mithras Capital put it in a June 14th 2008 letter:

"Since Microsoft made its initial offer to buy Yahoo! at a substantial premium, the Yahoo! Board has undertaken a series of actions that, at best, demonstrate complete neglect of its fiduciary duty: from instituting a poison-pill type change-of-control plan, to setting an unrealistic price for the company, to walking away from an alternate transaction with Microsoft that is clearly superior to the alliance forged with Google. It is obvious that Mr. Yang and the Board have their priorities, and these priorities do not include maximizing value for all shareholders, not withstanding the company’s weak rationale and rhetoric to the contrary."

After all the deals died

After all the deals died Yahoo's stock was still way up compared to before the hostile takeover attempt by Microsoft. Also, once the deal was on the table the Yahoo stock reached the amount per stock offered by Microsoft within a day. All these crybabies could have sold their stock then, but no, they hoped for the deal go through. Now it flopped and you basically lost a good chunk of money. It is easy to blame now someone else just because your own endless greed blinded you.

Share Value

Oh come on. I'm tired of hearing about how this hurts the poor Yahoo share owner. Does anyone really believe that Yahoo or Microsoft would be worth more after this deal? This is all about people with no interest in Yahoo and all their interest is scoring off the run-up to the buyout and then selling it all to the fools who buy after a deal is done.

Stock buying hint 101: Buy on the rumor, sell on the event.

There is not now, never was, and never will be any synergy between Microsoft and Yahoo.

Three years from now, Yang will be praised for having the insight to keep Yahoo out of the hands of Ballmer, or far more likely, Ballmer's successor.

Steven

Loose Cannon

Loose cannon comes to mind. If the leader lacks the vision and judgement to guide the corporation, he should be replaced. He should have been replaced long ago with someone more technically competent. As it is now, M$ has been painted into a corner. Their old businesses have nowhere to go and they have no new ideas. I believe M$ cannot change. Those who may have the necessary vision to give up the belligerance and turn to sound business practices will not be given the chance as long as the cash cow gives billions. As long as M$ can keep cranking up the cost of that other OS and Office to their locked-in customers and keep the channel loaded to retail, that cash cow will keep delivering milk. With the arrival of GNU/Linux on retail machines, that should end in a year or so. Then Ballmer will be gone in a New York minute.

GNU/Linux has been shown to be viable on servers, gadgets and tiny notebooks. This year, first-time PC buyers will have a choice. Repeat PC buyers will know that GNU/Linux is viable and many will make that choice. Business will abandon M$ soon. The consumer will learn by word-of-mouth that the blue "e" is not the Internet and that they can do without M$. The fall from grace will accelerate rapidly in an implosion. Vista has put these choices in the face of many: OEM, consumer and business. There is nowhere to go but down for M$.