Five reasons to fire Ballmer

On July 1st, Bill Gates will retire. He'll still spend about 20% of his time on Microsoft projects. If Microsoft is to retain 20% of its economic clout in five years time, the company's board should start working on firing CEO Steve Ballmer now.

Why? Because Ballmer has been in charge of Microsoft for the last several years and he's been running it into the ground. Even before Gates announced that he was going to retire, Ballmer was already in charge and his record of failure speaks for itself.

1) The Vista Technology Flop. Technically, Vista was crap. You don't have to believe people like me who think Vista, a year and a service patch since its release, is still an over-priced joke pretending to be an operating system. But, maybe you will believe Microsoft's top-level executives when they say its trash.

Who was at the wheel of the good ship Microsoft during the tens of thousands of man-years and billions of dollars to create Vista? That would be CEO/captain Steve Ballmer.

2) The Vista Business Failure: Microsoft has managed to sell junk before but this time it had set itself an impossible job. Vista does nothing better than XP except to cost more, require greater system resources, and give users new headaches with device problems and UAC (User Account Control).

That's a hard sell. In fact, it's an impossible sell. Ballmer denies that Vista sales are poor but in the last reported quarter, Microsoft operating systems sales were down 24% even though PC sales were up 15%.

Ballmer denies that Vista was at fault. In a way, he's right. If Ballmer, who is an overgrown salesman, thinks sales dropping while the market is expanding means Vista is doing well, he clearly deserves a lot of the blame.

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3) The Yahoo Fiasco: If Microsoft had pulled off the hostile takeover of Yahoo, it would have been the biggest acquisition in the company's history. It would have given the company a real presence in both the Web search market and in online advertising. Ballmer couldn't close the deal.

Maybe the acquisition would have worked. Maybe it wouldn't have. I can argue either side of this case. Ballmer didn't just screw the pooch, though he drove Yahoo into becoming buddies with Microsoft's arch-enemy Google. Smooth move dude.

If anything ever does come out of Microsoft/Yahoo it will be because Carl Ichan has taken an interest in the proposed deal, not because of anything Ballmer did.

4) The Fall of Microsoft Office. Remember when Microsoft was talking up how great the initial sales of Office 2007 were? A year later, in Microsoft's third quarter results, we see that Office's operating income has dropped from $3.4 billion, to $3.1 billion. Microsoft Office income declining!? Isn't that a little like Exxon reporting declining profits in the summer of the $4 gallon of gas?

Even more telling is that Microsoft, yes Microsoft, has now confessed that they can't support their own Open XML standard, but that they will support ODF and PDF in Office. You know, the 'enemy' document formats.

As Anders Bylund of The Motley Fool put it, "I can't say that Google or Sun or anybody else just won a bigger share of the office software market, and if they did, it won't help their revenue or profits directly anyway. But it's clear as day that Microsoft just took a serious hit, and the impact may take a long time to make itself felt but it will come." And, what does Bylund predict may happen come that day? "The company's biggest revenue generator may be a shadow of its former self in a few years. I just hope that Microsoft has some alternative business prospects on tap -- and no, tackling Google's search hulk head-on doesn't count."

5) Who doesn't love you baby? The stock market that's who. Today, Microsoft's stock is wobbling just over $28. The 52-week high was $37.50. What do you think will happen to Microsoft's stock when Bill officially retires? It won't be pretty.

Rationally, since Gates has been hands off at Microsoft for years, it shouldn't make a difference, but the stock market tends to think with its gut, not Adam Smith's rational 'invisible hand.' Now, take a long hard look at Ballmer and his record. Do you see a leader? I don't and I suspect neither will Microsoft's Board as Ballmer continues to drag Microsoft down.

If he does get sacked, don't worry about him though. Besides being a billionaire in his own right, Ballmer can always get a gig on Dancing with the Stars. He is, after all, quite the... dancer.

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