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How Long Does Steve Ballmer Have Left?

Everybody knows that we live in a bottom line, what-have-you-done-for-me lately culture, short on patience and long on desire for short-term results. Sports fans know it. Hollywood watchers know it. Investors know it. And Steve Ballmer knows it, too.

Last week was rough for Ballmer. His plea to financial analysts to tone down the hype on expectations for Vista sales got a cool -- to put it mildly -- reaction from the brutal financial community, and his company's ever-fragile stock price (or, more specifically, its market capitalization) took a multi-billion dollar beating not long after he told everybody to chill. Far from being his usual cool yet hyper-enthusiastic self, Ballmer seems nervous these days ... and maybe even a little lost for words. Check out his response to a financial analyst's question from this article (an article that, off topic and incidentally, offers the tantalizing suggestion that Microsoft should buy Salesforce.com):

"What I basically tried to say in the very highest level was that you shouldn't think of a huge surge in fiscal year ‘08 versus fiscal year ‘07, huge relative -- I mean, in some senses whatever you think the growth is of PCs in developed markets, in developed markets -- because I talked about emerging markets -- we should do somewhat better than that. We shouldn't do that much better, we should do that much better, whatever it means. This is before the accounting one-time blah, blah, blah."

Uh, thanks for that, um, guidance, Steve. We're sure that Microsoft investors, partners and customers feel much better now or will as soon as they get your answer translated into something closer to Standard English.

We're not here to bury Ballmer. Yes, things are little tough for Microsoft right now. Vista is on somewhat shaky ground so far (despite the fact that Bill Gates is trying to rally the troops), and the all-important stock price, which showed serious signs of life throughout the fall and winter, is starting to become an issue again. Redmond has even suffered some public humiliation at the hands of Apple and its advertising agency without really being able to mount an effective response.

But let's not go crazy here. Microsoft still rakes in billions upon billions of dollars every year. It has massive cash reserves. It has overwhelming market share for Windows and Office and probably will continue to dominate those markets, at least for the time being. Yes, there are challenges: Apple is making a serious consumer push, Linux might be on its way becoming the OS of choice in developing countries, and the specter of piracy worldwide looms. But Microsoft's doom is not imminent, nor is it even hovering in the distance. The company is still a juggernaut.

All of that considered, we're not ready for Redmond to throw a veteran like Ballmer under the proverbial bus. Not at all. What we're wondering, actually, is whether Ballmer himself is getting tired of the game. He has obviously had a stellar career, and he's not likely worried about retirement funds. The question is whether his recent dip in enthusiasm (and, perhaps, coherence) is just that: a dip or a sign that he'll be taking his gold watch and heading for the easy chair soon. Ballmer's no quitter -- never has been, as far as we can tell. But there would be no shame in him joining his old buddy Bill in Microsoft lore and handing over the operation to a new generation. We'll see how many battles he has left in him, and how many he can win.

Is Steve Ballmer still an effective CEO? How long do you think he'll continue to lead Microsoft? Tell me at lpender@rcpmag.com.

Posted by Lee Pender on 02/22/2007 at 1:20 PM


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