In the interest of full disclosure, this is adapted from a comment I made in Robert Scoble’s blog today.
So Microsoft today spent 6 Billion on an advertising company, aQuantive. First, I have to say, that’s one of the ugliest sounding names I’ve heard in quite some time.
More importantly, I think if they rummaged around in the sofa they could’ve found another billion and bought Chrysler instead. Given the complete lack of any stated vision or direction coming out of Microsoft these days, buying aQuantive isn’t all that different from them buying Chrysler. I doubt Ballmer et al. really know what they’ll do with it. They’ve just got some vague idea that since other people are doing well with advertising, they need to as well. Setting aside the fact that I’m deeply skeptical about online advertising at all (how much money have you spent, dear reader, as a result of clicking on a “sponsored link”?) this is another demonstration of weakness from Microsoft.
The current strategy there seems to be to copy a lot of other people’s stuff (Apple: Vista; Google: Search) that than really find anything new on their own. OK, so that’s not the first time the charge has been made but I’d argue things are different now from the past. In the past, when Microsoft followed others into established markets there was some direction to it. Now there’s no plan. It just looks like they’re just doing stuff to do stuff.
As a long time watcher of Microsoft, I have to say it’s pretty clear that Ballmer is grossly incompetent as a CEO. Carly Fiorina was sacked over her performance and he’s done significantly worse for Microsoft than she did for HP. The fact that he’s not been sacked speaks to a board that is failing its shareholders. And I think that’s the why of the stock price. It’s going nowhere because of a Ballmer tax. No one has faith in the value of the company under his leadership and they don’t think he’s going anytime soon because MS has a rubber-stamp board. Buying MS is essentially buying to hold until Ballmer is gone and someone with vision comes to the helm.
The words of Cromwell to the rump parliament apply to Ballmer and the board:
You have sat too long for any good you have been doing lately… Depart, I say; and let us have done with you. In the name of God, go.
It really is time for a shareholder rebellion. The only people doing well at Microsoft are the executives and the board. Time to remind everyone who they all work for: the shareholders.
Of course, the biggest shareholder IS one of the executives. And that means nothing’s going to change soon.