next CEO of Microsoft will have to decide: continue the strategy initiated by Steve Ballmer to transform the company into a group present in both materials and services, or abandon the ambition to focus resources on software which made its success
The transformation initiated by Steve Ballmer -. unveiled just six weeks before the surprise announcement Friday of its retirement in a year later – plans to build Microsoft’s future on materials and services based on the “cloud”, cloud computing.
But the disappointing sales of tablets surface, after unsuccessful attempts to generate profits in research on the internet or in smartphones, fueling doubts about the viability of this option.
For years, investors require Microsoft to distribute to its shareholders the cash it invests in the moment deficit or side projects, and focus on the Windows operating system and Office software suite activities servers.
The activist investor ValueAct Capital Management, whose recent initiatives could played a role in the decision of Steve Ballmer to retire earlier than expected, is said to be in favor of such a strategy.
3 billion loss in Bing
the past two years, Microsoft has lost almost three billion dollars in the search engine Bing and other internet projects, not to mention the depreciation of six billion related to the acquisition of online advertising aQuantive . The group also had a charge of $ 900 million related to shelf space in the last quarter.
For the moment at least, the strategy Ballmer is not questioned. John Thompson, director of the independent group chosen to lead the committee to find the next CEO, said on Friday that the committee was “hired” by the transformation project. But the choice of the committee say probably along the sustainability of this commitment and openness to other options.internal candidate or new blood
“The choice an internal candidate, as Satya Nadella, head of servers, or another member of the Windows team, go in the direction of the reorganization and the strategic shift, “said Norman Young, an analyst at Morningstar.
“But the arguments do not fail to convince the company needs new blood, someone who can implement the strategy but also bring an outside point of view.”
This change of approach could lead the group to withdraw from the video game, abandon Bing or reduce its investment in tablets or other materials.
From a financial point of view, Proponents of a new strategy no shortage of arguments: the price of Microsoft stock has been stagnant for 10 years and shareholder activists claim their share of $ 77 billion of cash accumulated by the group, including 70 billion held outside United States.
initiatives materials dividend
For Rick Sherlund, an analyst at Nomura, announced the departure of Steve Ballmer means that the group begins listening for activist shareholders as ValueAct, which could result in initiatives dividend and share repurchases on 19 September, the date of the annual meeting between the management and financial analysts.
According to a source within the group, Steve Ballmer began to think seriously about his estate there are 18 months to two years after receiving a warning in 2010 when the board had reduced his bonus after the resounding failure of the Kin mobile phone and the Group’s inability to respond quickly to the launch of the iPad by Apple.
This is two or three months ago that Steve Ballmer came to the conclusion that the “good time to start the process” of succession had happened, the source said. Shortly after the investment of two billion ValueAct capital group.
The mixed results published in July may have sealed his decision to announce his departure, he has communicated to Board that last Wednesday. It is not known if the board has specifically asked him to leaveWhatever his successor, it will be faced with difficult or impossible choice:. Hire a juggernaut in a delicate process of molting or refocus on some profitable activities centered on the personal computer.
“I’m not sure anyone can do the job better Steve” Ballmer said Brad Silverberg, a former head of the Windows business and co-founder of private equity Ignition Partners.
“This is an incredibly difficult job, infeasible. Maybe he will change the definition of post, which will prelude to more significant changes. “
(With Reuters)
