Steve Ballmer Doesn't Need To Go

In the wake of the Microsoft-Yahoo merger collapse, there has been a lot of commentary about how Steve Ballmer’s job as CEO of Microbeast is in danger because the deal didn’t go through. Erick Schonfeld has a post up at TechCrunch that quotes an anonymous source at the software behemoth as saying Ballmer is uneasy — hint: he’s yelling even more now! — and the board is considering pitching him overboard. I’m going to side with my friend Kara Swisher on this one; I think much of that is probably wishful thinking by Microsoft insiders. I don’t think Ballmer is going anywhere — or at least not because of this.

So why did I say that Jerry Yang should be fired? Completely different story, IMO. Microsoft made a gamble that it could bag Yahoo, and that there would be enough synergies to justify the deal (adding Yahoo’s media properties, the ad-keyword business, etc.). You can debate whether that’s true or not, but in my opinion it was a fair bet to make. And when it looked like it was going to get too expensive or go needlessly hostile, Ballmer walked. No harm, no foul. Not to mention, of course, that this still isn’t over yet. The fat lady is just warming up.

Yang, on the other hand — either on his own, or aided and abetted by the Yahoo board — waffled and whiffed and came up with lame proposals for boosting the company’s value, and never produced anything that justified either a much higher share value or a dismissal of the Microsoft deal in favour of something better. There is nothing better, and Yang knows it — and most Yahoo shareholders likely know it too. That’s why he deserves to leave, and Ballmer deserves to stay.

Comments

[skeeterses:]

After helping to outsource American jobs and American factories, you investors are whining because Yahoo's CEO didn't deliver "shareholder value." You investors need to grow up and perhaps learn some job skills besides betting on stock prices. Your greed has allowed ruthless corporations like Walmart to help destroy the American Dream. Now take some of your own medicine.

2008 May 05 04:55 AM

[wallawallab...:]

Ballmer should be gone already due to Vista follies alone.

You are clearly a softie/ballmer cheerleader.

2008 May 05 06:32 AM

[deaverb:]

Ballmer was smart not to overpay. Welch did the same with Honeywell, bought the cheaper First Associates, and did well by his company too. Ballmer could buy it today for 25% less. Good for him--and I can't stand Ballmer. He won this battle.

2008 May 05 04:24 PM

[jhcmal:]

Well, the result is against most people’s expectation. But rethink about the different corporate cultures the two companies have, it is not hard to realize this possible outcome. Sounds a hindsight? Yes, it is.

Ballmer ’s hardball playing at the beginning and “microsofteded ”his stance to sweeten the deal to $33 later and finally gave all up, all proved that Ballmer was not a good dealmaker or negotiator and might have taken a myopic view.

Was it due to his personality or due to culture issue? Maybe both. MSFT shareholders may take a deep relief for the short while YHOO’s may take a hit. But Keep in mind, the market is to reflect a company’s long term value instead of the short eventually.

Ballmer said MSFT can go forward without YHOO. Hope he is right or he may have made a big strategic mistake by walking away as time waits for no one.

2008 May 06 11:04 PM