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back to article Ballmer shoots down Microsoft breakup advice

Steve Ballmer has scotched suggestions from investors at Microsoft's annual shareholders meeting that his company should spin off some of its divisions Ballmer and Microsoft cofounder Bill Gates faced a fractious audience, with many stockholders expressing their displeasure at the company’s poor stock price and returns. One …

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Bronze badge
FAIL

Classic old MS: arrogant, clueless, slow, lousy crooks in charge...

... and their ilks, the broken bureaucracy just keeps kicking the crap as long as paychecks come in time.

Good luck, shareholders - you will need it soon.

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Unhappy

Problem is

If they spin off the company who get's the profits from patent trolling? This is probably going to be the biggest money spinner for them. Unless the patent fairies get their act together.

Shame as Microsoft had some nice hardware in development at times, if only they dropped the "Must run Windows and Office" mentality.

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Anonymous Coward

Err?

It appears that the shareholders are already having good luck, what with the double digit growth in seriously unstable times.

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Facepalm

Double-digit growth

Wow, somewhere between $10 and $99 extra relative to the year before. Even to the rest of us that is ... really not a lot.

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Anonymous Coward

There's a lot of future potential booked as revenue. MS has for a long time operated with extreme margins. To avoid accusations of improper conduct part of their strategy has been to increase spending to mask the seriousness of the problem. As a result more than 80% of MS staff worldwide are not involved in revenue-making activities or developments leading to future revenue. This "inefficiency" provides huge potential for cost-cutting and may provide some resiliency during bad times. It is however no permanent guarantee. MS current behaviour towards their competitors indicate that their slide towards the abyss already has started. MS may very well become the next Enron in a few years unless they get back on track to deliver products that the market wants instead of relying on strong-arm tactics to secure sales.

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Anonymous Coward

RE:Double-digit growth

Are you joking or just being stupid? Growth is messured in percent, so they have had >=10% growth.

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Headmaster

RE:Double-digit growth

I believe you talk about relative growth. Beyond my guess that the currency is dollars my interpretation is exactly what the sentence in the article says. Now, it seems that someone has a context specific convention of misusing the term growth, therefore to avoid confusion it would be prudent to not use it in ambiguous sentences.

By the way, nothing is measured in percent, it is not a unit, it is just a shorthand sign for a multiplication factor of 0,01. Which makes the sentence even more strange, not only does the reader have to interpret growth as relative growth, the quantification also assumes a specific numeric representation without even providing an actual number.

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Linux

Wouldn't that be...

...the blunt leading the bland

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mky
Pint

or...

The blind leading the naked?

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Bronze badge
Windows

or...

The blind leading the blank.

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Windows

Lets not jump to conclusions

Stockholders nowadays are in no comparison with stockholders in the "good old days", especially not in the current financial climate. Meaning: you have people who invest money in a firm in order to get something out of it on the long term. Your annual dividend and of course the hope that the value of the stocks will increase over time.

On the other hand you have your 'modern' stockholders who aren't in it for the company but for the quick money. These are the guys interested in a quick buck and the best way to achieve that is by getting some variations going on the stock exchange. No matter what. And that's where the big problem lies: - no matter what -. With options (put & get) you can actually "bet" on a change in value going either way. So if things are going bad for the company they'll go quite good for you.

So I think Ballmer, the fruitcake that I think him to be, is absolutely right here. Why on earth split up a company which is still in the black figures and generating a steady income? Only for the sake of a quick shake / buck / increase while otoh the assets involved could easily generate incoming over the years to come ?

The idea alone shows the problem here. While it could be a good thing for the stockholders and the short-termed financial values it doesn't have to be good for the company - at all -. IMO Ballmer deserves the benefit of the doubt here; a steady income is worth much more to a company than a quick - single - financial burst.

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Silver badge

@ShelLuser The key here I believe is the desire for short-term action, as in "piece of".

As fast a piece of the action as possible. Whenever one reads accounts of a shareholders meeting from a classic "long-haul" company (whoever they are Microsoft or another example of BigCorp) you always get a certain type of investor proposing variations on these types of themes. Not because the particular suggestion necessarily has any merit but because (as you point out) as long as they get something going they can earn on it whether it is a success from the company's point of view or not. These types definitely do not belong to the Warren Buffet school of long-term investors. Previous generations did not include a General Electric or an ICI in the speculative part of their investment portfolios, they included them for ballast and long term security.

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Agree

I have to agree on this. I'm not crazy about Msoft, but the "short term stock gains at any price, disregarding Every other consideration" crowd, trained by the Chicago School of Business, has wrecked many a company and just about bankrupted America. They're destructive bums.

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Gold badge

Just for a change...

...I agree with Stevie B.

Microsoft's USP is their pervasiveness. Most of their products are more interoperable (than the direct competition) with all the rest of the MS products you already own. (He calls this "synergy across product lines", but let's not split hairs.)

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Unhappy

Simple Point

There is rarely any point in breaking a big company up into smaller parts. All it does is generate fees for investment bankers. The investment bankers will then demand that the new companies 'realise shareholder value' by merging with other companies; a few years later, they will demand that they 'realise shareholder value' by demerging.

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Silver badge
FAIL

The only advantage to breaking up the companies is perhaps getting more divisions free from Ballmer's incompetence. The real question should be why does Ballmer still run things.

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FAIL

But seriously...

I would be remiss if I didn't at least mention the fact that Bing just sucks and should be wiped off the face of this planet.

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Joke

Don't change a thing

I think the current org chart shows they have the ideal configuration already

http://www.bonkersworld.net/organizational-charts/

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Anonymous Coward

But they're not firing! Have they crashed?

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Bronze badge

The shareholders might...

...do what our wonderful US Government couldn't do. Break it up.

We can only hope. Then Steve Ballmer might shrivel up and go away (after throwing a chair, of course).

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Megaphone

It is time to split

I agree with the investors. In fact I thought that MS should have split the Server and OS division off from the app division years ago. The fact that the apps are so dependent on the OS is a failuing in the current environment with opportunities in tabl;ets, smartphones, web 2.0 etc. If you can't run without your core OS then you will not last.

If they had the guts to reduce Office to the core features that 99% of use and ported it for the web2.0 or iOS or Android they would have more sales. It would be a big step but it would solidify their market in word processing and spreadsheets as there is nothing out there that is compatible enough for most businesses. Not even Google Docs or OpenOffice or the other options in the AppStore / Marketplace.

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Get rid of IE

I just wish they'd drop their rotten nonstandard browser, which is always two years late, and is holding up adoption of CSS3 and HTML5, since they only allow it on Win 7, as a clever marketing move, when every other browser runs on XP. The problem is, half the user base is still using XP, which works fine if you don't give a hoot about the Win 7 glitz. Libraries, schools, and institutions will be using it for awhile. Heck, my old emachines XP machine is faster than a newer Win 7 Dell machine I tried. This means a lot of people will not be able to see CSS3 and HTML5, so webmasters - once again - will have to develop multiple sites like in the browser wars. One for Real browsers, and two or three more for Msofts abortions. Many will just wait until the dust settles and not do HTML5 and CSS3.

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Anonymous Coward

Or you could

use Firefox or Chrome?

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Anonymous Coward

Ditch the crap.

Microsoft should stick to what they are good at and whats profitable.

Ditch the unprofitable crap like Zune, Xbox, Windows Phone.

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FAIL

eh?

so they should ditch the entertainment division which is actually earning them roughly $1.6 billion profit last quarter roughly as much as their windows & live division? Yeah that would make loads of sense. Have a look at these figures: http://www.microsoft.com//investor/EarningsAndFinancials/Earnings/PressReleaseAndWebcast/FY12/Q1/default.aspx

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Anonymous Coward

Problem is...

It ignores the $14bn that was poured into it to kick it off.

Microsoft are very clever at hiding losses, so when people link to a single quarters earnings, it doesn't show the full story.

The Xbox360 will never make Microsoft a dime of profit due to it's development and RROD costs, Zune was a massive money hole too.

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Facepalm

Re Problem is ...

AC 12:52..."It ignores the $14bn that was poured into it to kick it off.

Microsoft are very clever at hiding losses, so when people link to a single quarters earnings, it doesn't show the full story."

Lets see now, that's an investment which is returning a current profit of $1.6bn per quarter on that original $14bn. I make that a return of about 45%pa before taxes, and even on a discounted cash flow basis it's going to be well over 35%. If they scrapped that they would be demonstrating gross economic incompetence.

I never am able to understand why, when a some of projects are successful and are making a good return, there is always some one who will say "those projects ought tyo be scrapped because they cost too much to develop" - presumably because they are too stupid to realise that scrapping something that is earning a lot more than it is currently costing is the sure way to guarantee making the last possible profit (or the greatest possible loss if the development costs haven't already been recouped).

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Anonymous Coward

Buzzwords save management from shareholders again

Repeat after him: synergy, synergy, ... Oooh. Aaaah.

How about getting rid of Ballmer, would that improve the shares performance?

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Anonymous Coward

Diversification

I was down with Microsoft a few months ago, looking at their private cloud offerings. They're assembling a software suite based around both System Centre (offspring of MOM/SMS) and Opalis, which is currently very much "version 1". But Microsoft have staying power---think how much time they have given for Hyper-V, even though its commercial progress has been painfully slow.

What struck me was that, in that business are at least, Microsoft were behaving like "another private cloud solution provider". There were good bits and bad bits, there was clearly visible gaffer tape in the current offering, and the current and "next-gen" offerings were being positioned alongside competitive offerings without the usual swagger.

From what I've seen, Microsoft is genuinely trying to compete in a crowded field here, rather than use leverage from other business areas. I'm not sure they'll succeed, but the demeanour is very different from five years ago.

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Anonymous Coward

nobel peace prize

"we don’t censor beyond the level demanded by the law"

that's mighty impressive certainly in respect of China's legislation

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Facepalm

Good to see the Money Men acting true to form; try to rape the company for a quick buck, rape the planet and 3rd World for a quick buck, keep the country club chums in charge.

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WTF?

Red letter day!

Mark this day, but I actually agree with the old ginger buffoon.

10 years ago, M$ were being threatened with being broken up due to their monopolistic actions, they had too much power and were using it to further their business. Now the stock holders want to do just that?!? I don't think the various regulatory authorities were saying split M$ up as they're not good enough value for their stockholders!

The PC is the 20th Century, M$ need to find a new cash-cow, and the only way to do that is to throw product at different markets. They best way for them to do that is if they can afford to gamble and use their (de facto) monopoly..

Plus, y'know, the bigger they are... ;-)

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Devil

Balmy is awesome

Hope they keep him forever.

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