Steve Ballmer Is Driving Microsoft Off a Cliff

Say what you will about Steve Jobs' mom jeans, but he'd never be caught looking this silly on camera.
Even for non-techies, it's easy to understand just how far Microsoft has fallen since Steve Ballmer was put in charge.

Ballmer -- the sweatinest, spittinest CEO this side of the Mississippi -- was handed the reins in January of 2000. And while his tenure has always been a little rocky, it's never seemed as tumultuous as it has in the past week.

Last Wednesday, Microsoft lost its status as the largest tech company in the world after Apple passed it in market capitalization -- i.e., its value as measured by the stock market. Bad news that came a day after an even more significant development: the "voluntary departures" -- read: firings -- of two prominent executives.

So how is this Ballmer's fault?

Under his watch Microsoft has endured a lost decade where the company's fortunes have decreased.

Jean-Louis Gassee is a venture capitalist and media watcher. He's also a former Apple employee. But tribal allegiances don't make his systematic dismantling of the Ballmer era any less thorough.

Gassee says there is a joke familiar to most businesspeople.

The departing CEO meets his successor and hands him three envelopes to be opened in the prescribed order when trouble strikes. First crisis, the message in envelope #1 says: Blame your predecessor. Easy enough. Another storm, the the CEO opens the second envelope: Reorganize. Good idea. And when calamity strikes yet again, he reaches for the third: Get three envelopes...
Ballmer, he says post-executive firing, just opened the second envelope. Meaning the next one he touches will mean he's out of a job.

In a decade of leadership, Ballmer has left Microsoft stock half as valuable as when he found it. Apple's, meanwhile, has gone up 1,000%, from $25 to more than $250.

Apple -- the post-WHAM! George Michael to Microsoft's Andrew Ridgeley -- is selling a million iPads a month. Meanwhile, Microsoft 86'ed its tablet competitor, the Courier, before it even had a chance to be confirmed as being in development.

Google's Android is making significant inroads in mobile, where iPhones and Blackberrys currently dominate*. Meanwhile, Microsoft is asking consumers to wait until the end of the year for Windows Phone 7 which, if its clunky name is any indication, will arrive as stillborn as Vista.

*Ballmer on the iPhone in 2007: "There's no chance that the iPhone is going to get any significant market share." Not his smartest prediction.

On a more anecdotal level, if you've ever watched a loyal Microsoft employee struggle with his or her company-issued phone, as I have, then you already understand the fundamental issue the company is facing: even the people who work there think their products suck.

(Don't believe me? Just check out the terrible things they say when offered anonymity.)

Sure the Xbox is pretty cool. But that's been a financial blackhole for years. Same with Bing, the Google search competitor that's a competitor in name only.

Microsoft still makes a ton of money. Which is why it's able to throw so much cash into developing crappy prototypes that never see the light of day.

But the handsome profits only come because of Windows and Office. The same sacred cows it's been milking since before Ballmer was made boss.

In this way Microsoft is like the New York Yankees of tech; a perennial powerhouse that spends its way to victory. In this analogy that would make Ballmer George Steinbrenner.

But there's one key difference between the two: Steinbrener was actually The Boss, whereas Ballmer can still get canned. As Gassee suggests, now might be the time for that third envelope.

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