Microsoft Should Fire Steve Ballmer, or Hire SuperNanny. Or Both.

Is no news good news? Most people expected something on the Microsoft (MSFT)/Yahoo (YHOO) front by now, and such folks are generally reading the absence of information as bad news.

I disagree, sort of. Ordinarily absence of news in a pending deal means the two parties are still talking privately and making progress, so they don't want to queer the deal by cudgeling one another, especially if it's just on principle.

So that would usually be my take here -- that the two companies are talking and we should just say "Shhhh" and walk quietly past the room -- but I'm not convinced. The insider-ish sources I have say that while bankers are still fitfully running up some hours, on Sunday Ballmer and Yang still hadn't spoken in weeks -- and doing a deal will requires those two to get over one another. (To borrow a nice one from Kara, they need to stop their adolescent staring contest.)

Here is what I think is actually happening:

• Passive-aggressive Yahoo is trying to say "mo' money please" without saying "mo money please" by saying nothing
• Confused Microsoft is sensing weakness in Steve Ballmer, and division managers who whose kingdoms would be under threat post-deal are lobbying furiously to have things killed
• Ballmer, who has handled this badly from the start -- We're going hostile! We're walking away! We love you! -- is caught between his division veeps, his desire for Yahoo, and his own increasing sense that he has no idea how to bring off this sort of deal

What should happen is this: Ballmer should re-canvass Yahoo's largest shareholders and ask what firm price in cash would get them on-board, and then offer it. No more futzing through middlemen bankers, just ask and deliver. I doubt this will happen -- Ballmer is caught up among internal politics, his own increasing impotence, and childish Yahoo intransigence -- so he is stuck and looking more and like someone who keeps threatening to ground his kids, but never does. As we have all learned from watching SuperNanny, the trouble is rarely with the kids; it's almost always the nitwit parents.

Such is the case here, so my recipe for action? Fire Ballmer. Think how quickly things would change at Microsoft, and in this deal. And then hire SuperNanny and film some Microsoft meetings. I'd watch.

Comments

[aardivark:]

So are people finally beginning to figure out that Steve Ballmer's only qualification for his current job is that he was Bill Gates' college buddy?

2008 Apr 28 08:04 PM

[Christopher...:]

Hey Paul - I appreciate your fresh take on this situation. Personally I welcome the acquisition as I think it will generate some true competition for Google. On the other hand, it's starting to feel like the Google machine is starting to slow a bit and perhaps MS does not need Yahoo! long term to compete.

So that leaves me wondering what the heck MS is doing! Are they smarter than we all think and working out some super back room deal, or are they really floundering as you imply?

Online time will tell!

2008 Apr 29 12:03 AM

[raising4dau...:]

Given enough time (another 5-10 years), Ballmer will demolish what his college buddy built. Sheez, this guy is a total dufus.

2008 Apr 29 12:22 AM

[Jon T:]

Don't let's blame Ballmer for everything. Bill Gates hardly left Microsoft with a bright future. He is just as much to blame.

Microsoft has to be broken up. That's what is needed - and let Monkey Man retire.

2008 Apr 29 06:59 AM

[Tom B:]

Paul: your words are most puzzling: "childish Yahoo intransigence". Why is it intransigent, or childish, to resist a deal that would destroy the Yahoo brand and quality of services, while not even HELPING the acquiring company, MSFT? Yahoo is RIGHT to oppose this nonsense.

You are right about Ballmer, but I think the writing's on the wall. OS X is built on a solid, high performance, secure BSD UNIX foundation. LINUX is based on a solid, high performance, secure kernel. MS Windows? Built on a spaghetti hodge-podge of immature technolgies stolen in the 1980's and never properly modernized. Poor performance. NO security. Weak development tools. ONLY inertia and ignorance keeping it lumbering along like something out of Dawn of the Dead.

2008 Apr 29 08:41 AM

[tedstr:]

Microsoft already has its own Yahoo...it's called MSN. They aready own the most desirable real estate on the web...it's called IE. What makes everyone so sure they would know what to do with another asset like Yahoo. They won't. Software and tech ain't the web and MSFT doesn't understand that.

2008 Apr 29 08:52 AM

[N. Venkatraman:]

I think Steve B. should just walk away. There are many other ways to invest the $41B to develop the capabilities to win in the online space. The postmerger integration is usually thorny; the fact that it is a hostile (or quasi-hostile) acquisition will only make postmerger integration worse. And MSFT stockholders will lose (and Yahoo stochholders will also partly lose since they will get 50% of the value in MSFT stock. Just walk away, Steve.

2008 Apr 29 11:54 AM

[wobatus:]

He should walk away. Yahoo, the instie investors investing other peoples money, ect., will be pilloried if msft walks away. They can buy yahoo cheaper next year.

Unlike some others, i don't think msft desparately needs the deal, at least not now.

Tell you what, I would crack up about the egg on Bill Miller's face if msft walks. But it'll likely get done at $33 or so, so all can save face. Maybe msft should just make it so the dweeal is actually worth $31, not less with its now lower stock price.

2008 Apr 29 12:04 PM

[User 185028:]

Its MS' stupidity that is causing this problem. The expectation was set when they made their initial UNSOLICITED bid of $31 to a company that is NOT for sale. Who in their right mind would think that YHOO would take the initial offer? Who in their right mind would think that MS actually went it with a best and final offer on their initial bid? MS leflt themselves no margin for error at all....

2008 Apr 29 12:30 PM

[Tom B:]

"MS leflt themselves no margin for error at all...."

I'm thinking of that poor dude who proposed on national TV at the half time of that basketball game......

2008 Apr 29 01:47 PM

[brewer:]

Neither Ballmer or Gates ever had a clue. To wit: 640k is enough memory for anyone. They inherited the PC market. Gates had some business sense at least (clueless on tech though) but Ballmer?

Developers! Developers! Developers! Developers! Developers! Developers! Developers! Developers! Developers! Developers! ...

2008 Apr 29 04:38 PM

[My Idea:]

Today, Yahoo stock up almost a $1 , maybe somebody knows something or maybe some information leaked about the Mega deal.
Anybody can translate todays action?

2008 Apr 29 04:48 PM

[jimocarroll:]

Has anyone ever seen Steve Ballmer and Homer Simpson in the same room?

2008 Apr 29 04:49 PM