Microsoft\’s Ballmer kills call for break-up – Computerworld

Computerworld – Microsoft’s CEO Steve Ballmer yesterday dismissed a call that he should do what the federal government failed to do more than 10 years ago: break up the company.

“Is it time to break up Microsoft?” a self-described “frustrated” investor asked Ballmer during the company’s annual shareholders meeting Tuesday.

Ballmer quickly nixed the idea.

“It’s not in my natural genetic makeup to think that way,” Ballmer said. “I obviously don’t think it is time. I don’t think it would be useful.”

“There’s a lot of synergy across the company, and it’s been a real strength,” said Gates. “I don’t think there’s a line where you’d find net simplicity by trying to create a new company.”Bill Gates, who handed the operational reins to Ballmer a decade ago but remains Microsoft’s chairman, backed the current CEO in one of the two times he spoke at the meeting.

Questions about Microsoft’s business organization have come up irregularly, but the most recent demand for a break-up largely stems from an October note by Goldman Sachs, said Rob Helm, an analyst with Directions on Microsoft, a Kirkland, Wash. research firm that focuses on Microsoft.

“Part of it stems from Friar’s analysis,” said Helm, “although investors are also unhappy with the stock’s performance over time. They’re starting to ask if there should be fundamental changes to the business.”

In early October, Goldman Sachs analyst Sarah Friar downgraded her position on Microsoft from “buy” to “neutral,” and along the way, suggested that the company would be worth $52 billion more if it broke into several entities.

“There’s a distance to Microsoft’s offerings, who they’re targeting and also their financial performance,” said Allan Krans, an analyst with Technology Business Research, explaining why investors and Wall Street are asking questions. “When you look at Microsoft, it’s not as cohesive as other companies, like HP. There, printing is a big part, but it’s not carrying the company.”

Three weeks after Friar’s note to her clients, Ballmer called the idea of breaking up “nutty” and “the second most crazy idea I have ever heard.”

On Tuesday, Ballmer used more measured words.

“All of the people we compete with in devices will be in phone, PC, and TV, which in our case means Xbox, Windows, and Windows Phones. It’s Apple, it’s Google, it’s us,” said Ballmer. “Divesting something only means creating a harder time competing for all relevant parties.”

via Microsoft\’s Ballmer kills call for break-up – Computerworld.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s