Steve Ballmer faces calls to step down

Microsoft CEO is "stuck in the past" says fund manager Einhorn

Microsoft CEO Steve Ballmer has faced his first public call to step down, as hedge fund manager David Einhorn accuses him of being "stuck in the past".

Speaking at the annual Ira Sohn Investment Research Conference in New York on Wednesday, Einhorn claimed that it was time for Ballmer to step down and "give someone else a chance".

"His continued presence is the biggest overhang on Microsoft's stock," he said, according to a Reuters report.

Einhorn's Greenlight Capital hedge fund currently holds around 9 million shares in Microsoft, 0.11 per cent of the company's outstanding shares.

The comments came as IBM overtook Microsoft in market value for the first time in 15 years, as Microsoft's shares continued to remain static - despite a small boost following Einhorn's comments.

Apple passed Microsoft as the biggest tech company in the US in 2010, a position Microsoft had enjoyed for most of the last decade under Bill Gates' leadership.

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Latest comments (17)

I find it rather strange how one person can affect a companies stock so badly.

People think Apple will fall once Job's leaves and MS will continue to be static with Balmer. Surely innovation and consumer appreciate for brands is more important.

In the long term CEO's might effect stock, but I highly doubt Apple or Microsoft would instil a CEO that couldn't direct the company in ways Gates and Jobs have.

Every industry suffers from "the past" I can't see any multinational ever risking putting the company in the hands of a rising star. Nokia appointed Stephen Elop as their new CEO, he is known to be of the Balmer regime. Does this mean the new Nokia direction is also doomed?

Edited 2 times. Last edit by Mark Abraham on 26th May 2011 12:28pm

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Martin Rohatynski student 7 years ago
Well, I am for one am not happy at all with how Microsoft are releasing a new Windows more frequently now. Windows 7 is still great and it deserves at least five more years on the market. Will Windows 9 come out in 2014?
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Christopher Bowen Editor in Chief, Gaming Bus7 years ago
All of this damage - perceived or real (it's mostly perceived) - is caused by speculation, like the Apple damage Mark mentions should something happen to Steve Jobs. Speculators are the people that do the damage, and frankly, our reliance on them shows a flaw in how we do things. I stopped reporting on share price because sudden movements due to events or singular people almost always correct themselves.
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Show all comments (17)
Nick McCrea Gentleman, Pocket Starship7 years ago
You only have to read the comments on the mini microsoft blog to see that there's at least some (self-selected admittedly) agreement within MS itself.

The problem isn't that MS is doing badly, it's still enormously profitable. It's that it seems to struggle at generating new markets, identifying new trends and finding the profits that will sustain it after the era of Windows and Office comes to an end. The Xbox business is profitable now, but took billions to establish. It's made repeated failed efforts to establish a decent mobile business, and now partners with another struggling behemoth (Nokia) in an effort to grab share.

You can't blame investors who hold significant MS stock to be irritated by flat growth over an entire decade, when companies like Apple have generated huge stock price growth over the same period. You could argue that it's not a growth stock and investors shouldn't be looking for the same stratospheric returns they'd get from early Google investments, but I think the problem is it's a hugely profitable company whose profits are built on business that look like they could become obsolete if MS aren't careful.
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Adam Campbell Studying Games Technology, City University London7 years ago
I agree with Mark A. I have never understood it.

It's not like as if a replacement to Apple would be incompetent and couldn't drive innovation, and at the same time I don't think Jobs' approach is perfect either.

As for Microsoft it's not as if all the innovation comes from one man, all Ballmer needs to do is know when to seize major opportunities. Some of the Windows Phone things and new system on chip support in Windows are pretty major opportunities being worked on.
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Neil Young Programmer, Rebellion Developments7 years ago
@barrie - A new version of windows every couple years was easier to take when the PC it was installed on would go obsolete that fast - now you can get by with pretty old hardware unless you want to do anything demanding. Bit more of an ask to update windows when the PC is still up to spec.
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Graham Simpson Tea boy, Collins Stewart7 years ago
You forget that a new PC comes installed with the latest version of Windows. While you may be happy with an old box running a dated OS purchasers of new PCs will definitely not. Especially as newer versions of OS are adapting as technology changes. Witness, for example, the ease of use/social/apps enhancemenets in the next Windows iteration as one example off the top of my head.
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Neil Young Programmer, Rebellion Developments7 years ago
@Graham: That does nothing to justify expecting existing customers to pay the fairly hefty cost of a new version of windows. When people were upgrading the PC regularly anyway, latest copy of windows was an included cost in the total price. I suspect your "dated OS" assertion is somewhat excessive anyway - in fact many users may well be happy with as far back as XP, as long as it does what they need from the PC.

Also, going to be harder for MS to persuade people who've bought the OS once to pay again for an updated version when other platforms are providing the equivalent for free.
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Charles Dawkins7 years ago
I think a lot of people forget that Microsoft has had it's hands tied for a while now. May 12 that antitrust agreement expired so lets see what's going to happen now. Just look at what's going on and tell me that eveything isn't coming together with all their products. The fusion of Bing, Zune, Skype, MSN, Lync, Xbox Live, Office, Skydrive, Azure, Marketplace Apps and Kinect is happening. The strategy is being formed and to me it looks awesome. The more I see what the WP7 Mango update features are presenting this will be the phone to have come Autumn. Their 3 screen approach is coming together with PC, TV (XBOX) and Phone. Funny that all this is happening under Ballmer.
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Angus Syme Senior Artist, Lionhead Studios7 years ago
One thing I will say (admiringly) about Apple is their ability to tell the public 'you want this'. Their genius in this allows them to create markets for their hardware - with the ipod, then the iphone and now the ipad. They create aspirational products that look sexy and handle fairly intuitively and people lap them up.

They're less successful with new apps (I have yet to see people raving about facetime for example) but they create brand loyalty, expand their markets and the design quality of their products has people wandering across going 'oohhh - an ipad! can I try?'

MS seem to be perceived as a static and somewhat sluggish elder statesman for computers who seem to be following apple/facebook/google rather than innervating in their own right. Which is unfair in many cases as they've produced some great stuff and have more on the way, but the public opinion seems pretty cemented against them (It doesn't help that their main strengths outside the Xbox are in office/industrial computing, spreadsheets and so on - not exactly a field which is going to make your neighbour go 'wow... I must get me one of those).
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John Bye Lead Designer, Freejam7 years ago
If you think the rate of release of new Windows versions is bad...
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Rob Homewood Game Designer, Unity Programmer & Producer 7 years ago
I know this is not really that big in our field per say but I've been messing with Ubuntu recently and the latest version looks great (if somewhat simple) and really has improved considerably in the last few years.. any thoughts?
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Daniel Parker Senior Engineer, Proper Games Ltd7 years ago
I think they need to advertise like they did back in the good old days...

[link url=

(always makes me smile)

: D
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Murray Lorden Game Designer & Developer, MUZBOZ7 years ago
I'd love to see the next version of Windows focus on improving their look and feel as a whole. Really let users streamline and customize their experience.

Edited 4 times. Last edit by Murray Lorden on 27th May 2011 12:38am

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Thom Holland Illustrator, writer 7 years ago
@John Bye
Yes, OS X has new versions frequently, but anything between changes in big cat (Panther, Tiger, Leopard etc) updates automatically for free as constant software and security patches.
More importantly, when the next big version comes along (eg. Lion), buying it costs a grand total of $40. Last time I went to get a new Microsoft OS it was in the hundreds of dollars, and then they tried to force everybody to make the change to Vista, which was incredibly flawed and wouldn't run half of your old software without huge system updates and patches. In fact, if you wanted an older version on a new computer you had to buy it separately, install Vista and then DOWNGRADE to XP. Which a lot of people have no understanding of how to do so were stuck with a powersuck OS.
I'm just saying: Why make it a task -and an expensive one at that- for your users to get a better experience out of what they're already shelling thousands of dollars out for, particularly when improvement is incremental at best?
Oh, and the Windows 7 launch party campaign was gross. Talk about patronising...
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Stephen Woollard Online Infrastructure Specialist, Electronic Arts7 years ago
@Mark - "I find it rather strange how one person can affect a companies stock so badly."

I'll give you an example. A company I worked for some years ago was profitable for the first three years I was there. After that, the managing director left to start a new business and he was replaced.

For the next two years the company made a loss.

Same people, same products, same everything. The only change was the person at the top, and yet the company went from year on year profit to making a loss. It's why football team managers get fired for a poorly performing team - never underestimate the impact of a good or bad manager.

Edited 1 times. Last edit by Stephen Woollard on 27th May 2011 10:23am

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Tom Belton Composer / Producer, SharpNine Music7 years ago
@ John Owens - Windows phone has no chance of taking the number one slot - I take it you're not a windows phone user? I am and can tell you that after 24 months of Windows mobile 6.5 (MS make it impossible for me to upgrade my HTC handset to WP7, whereas if I had the very first iPhone I could now be running iOS 4.3) it's would be impossible! And I can guarantee you it's not "really cool".

Just look at the smart phone OS market share distribution - Windows phone gets 3%, and Android gets 33%; the biggest slice, 2% more than Symbian. Catching up with that would be unbelievable. I am somewhat of an Apple purist (having 2 MacBook Pros, 1 MacBook and a MacPro in my home) and I would get an iPhone, but I won't be bullied by Steve Jobs into having to pay tethering charges to my service provider, inflated insurance premiums and tarrifs.

Android will carry on gaining market share.

And I'm sure Android being open will mean that eventually someone will write software for it that will allow me to sync it to my Macs, in fact I'd be surprised if it didn't already exist..

Edited 1 times. Last edit by Tom Belton on 27th May 2011 3:41pm

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