Steve Ballmer’s Biggest Mistakes As CEO Of Microsoft

Steve Ballmer’s Biggest Mistakes As CEO Of Microsoft

JAY YAROW AUG. 27, 2013, 9:07 PM 20,265 6

Steve Ballmer is out as CEO of Microsoft, ending one of the most polarizing runs in technology. While he did much right at Microsoft — tripling revenue and profits, building the Servers & Tools group — Ballmer will also be remembered for presiding over the company’s loss of dominance and for what he did wrong.  And he did make some mistakes over the last thirteen years.Microsoft paid $500 million for Danger. It made the Kin, which was a disaster.

There was a time when the Sidekick was a popular smartphone platform. So, Microsoft paid $500 million for its parent company Danger in 2008. Two years later that team built the Kin phones, cheap little social networking phones that were way behind the times. After months on the market, Microsoft pulled the plug on the Kin.

Microsoft took a $6.2 billion write-down for its aQuantive acquisition.

In 2007, Microsoft paid $6.3 billion for digital marketing company aQuantive. Five years later, Microsoft took a $6.2 billion write down for the acquisition.

Microsoft took a $900 million charge for the Surface RT.

Microsoft had the right idea with the Surface, but the wrong execution. It charged too much for the Surface. When it had to slash the price of the Surface, it had to take a charge to properly account for its inventory of Surface tablets.

He burned billions and billions trying to kill Google with online services.

Business Insider

Ballmer let Android take 80% of the mobile phone market.

Ballmer tried to kill the wrong Google business. He was so obsessed with Google’s search that he missed Google’s mobile software — Android. Really, Android is what Windows Phone should be. It should be on 80% of the mobile phones around the world. Instead it’s on (about) 3% of phones.

He laughed at the iPhone when it was released.

He will never live this one down:

Q: People get passionate when Apple comes out with something new — the iPhone; of course, the iPod. Is that something that you’d want them to feel about Microsoft?

Ballmer: It’s sort of a funny question. Would I trade 96% of the market for 4% of the market? (Laughter.) I want to have products that appeal to everybody.

Now we’ll get a chance to go through this again in phones and music players. There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get.

In the case of music, Apple got out early. They were the first to really recognize that you couldn’t just think about the device and all the pieces separately. Bravo. Credit that to Steve (Jobs) and Apple. They did a nice job.

But it’s not like we’re at the end of the line of innovation that’s going to come in the way people listen to music, watch videos, etc. I’ll bet our ads will be less edgy. But my 85-year-old uncle probably will never own an iPod, and I hope we’ll get him to own a Zune.

Doing the HP Slate instead of the Courier.

Before Apple released the iPad, there were leaks of something called the Courier from Microsoft. It was a dual-screen, pen based tablet that had gadget nerds hyperventilating. Ballmer killed it before it was even close to being real. Instead, just before Apple released the iPad, he announced the HP Slate, a totally useless tablet that was DOA. The Courier probably would have been a failure, but at least it was different and exciting. It could have evolved into something that challenged the iPad.

Windows Vista was a disaster.

Ballmer says Vista was his biggest regret. “Oh, you know, I’ve actually had a chance to make a lot of mistakes, and probably because, you know, people all want to focus in on period A, period B, but I would say probably the thing I regret most is the, what shall I call it, the loopedy-loo that we did that was sort of Longhorn to Vista. I would say that’s probably the thing I regret most. And, you know, there are side effects of that when you tie up a big team to do something that doesn’t prove out to be as valuable.”

Trying and failing to buy Yahoo.

Microsoft was willing to pay $45 billion for Yahoo in 2008. If Jerry Yang and Yahoo’s board hadn’t screwed up, Microsoft would have been saddled with Yahoo. Ballmer got lucky his initial offer was rejected. (And in an impressive recovery from this screwup, he later realized his mistake and walked away — leaving Yahoo to make an even bigger mistake).

The pointless Zune

Apple released the iPod. It was a hit. Microsoft tried to do its own device, the Zune. It was not a hit. It was released in 2006. A year and half later Apple made the category obsolete with the iPhone.

No Office for iPad or iPhone.

So, Ballmer totally whiffed on mobile. He could have at least put out great versions of Office for the iPad and iPhone and started making money that way. Instead, he held back on Office under the misguided assumption that it would hold back the growth of iOS and make Windows mobile stuff work.