The Ballmer Days Are Over
Disclaimer: I own Microsoft stock. Yes, this is not pro-Microsoft but I feel the need to be very open about this. — He's employee number 30 and has been with Microsoft since mid-1980. In 2000, after nearly 20 years of service, Microsoft promoted Steve Ballmer to Chief Executive Officer.
Context & Ripple Effects
This piece lands almost exactly three years after Wired's Epicenter first asked whether it was time for Ballmer to go, and it reopens that question from inside the shareholder base — the author discloses owning Microsoft stock, which turns the critique into an owner's complaint rather than outsider sniping. What changed between 2008 and now: Microsoft closed its $8.5 billion acquisition of Skype on May 10, 2011, giving the service its own business division rather than folding it into an existing one — a structural bet that sits squarely on Ballmer's desk.
The financial backdrop sharpens the argument: per the surrounding coverage, Microsoft's profits were by early May 2011 comparable to Apple's, yet its market capitalization sat near $215B, with one analyst attributing the gap to what he called the 'Wal-Mart Disease' — scale without a growth story the market will pay for.
First-order effects
- Ballmer's leadership is now contested by his own shareholders while he simultaneously owns the just-closed $8.5B Skype acquisition and the decision to run it as a standalone division — the critique attaches to both the man and his most recent strategic move.
- Microsoft's board faces a public, stock-holding constituency asking the same succession question Epicenter raised in 2008, but now armed with a valuation-gap argument rather than mere dissatisfaction.
Second-order effects
- Investors pricing Microsoft against Apple — similar profits, roughly half the market value per the cited comparison — will press for either a growth engine or a leadership change, making every subsequent acquisition and division decision read as evidence for or against Ballmer.
- The Skype division structure becomes the immediate test case: if the standalone unit fails to show momentum under current management, it hands critics concrete proof; if it works, it extends the incumbent playbook of buying categories rather than building them.
Third-order effects
- If the pattern holds — decade-plus CEOs of maturing platform giants facing investor revolt once their company's growth decouples from its earnings — succession becomes a standing governance issue at large tech companies rather than an event triggered only by scandal or retirement.
- The 'Wal-Mart Disease' framing points toward a durable market structure in which profitable incumbent platforms trade at persistent discounts until they demonstrate a second growth curve, raising the stakes on each big acquisition to prove otherwise.
The trend: Investor patience with long-tenured CEOs of maturing platform monopolies is eroding as markets reward visible consumer and mobile growth elsewhere, making leadership succession a recurring pressure point rather than a rare event.