Ballmer announced that he was leaving the top job at Microsoft, paving the way for a generational change at the once-dominant technology company.
SEATTLE: C and giving it an opportunity to reinvent itself for a world dominated by mobile devices, social media and other technologies that have eluded its influence.
But with no clear successor to Ballmer lined up and a jumble of businesses that will require the skills of a polymath to run, the company still faces huge obstacles to reclaiming its former glory.
While Microsoft in Ballmer's reign as chief executive has yielded the spotlight to more glamorous companies like Apple, Google and Facebook, it still makes some of the biggest money-gushers in the technology business, including its Windows operating system for personal computers and Office applications like Word. Its profit last quarter was nearly $5 billion, compared with $3.2 billion for Google and $6.9 billion for Apple. Anyone who uses a PC to create a resume or a term paper or to do online banking is more often than not doing so on a machine running Windows.
But the PC business, which Microsoft has ruled for decades, is under siege by mobile devices like tablets, an area that Microsoft has stumbled in, and that Ballmer famously underestimated. Analysts say the company needs to act quickly to right itself.
"The walls are falling now," said George Colony, chief executive of Forrester Research, a research and advisory firm. "They may fall very quickly. There's not much time for the board."
Nonetheless, it has given itself a year to choose a successor, and Ballmer, 57, will stay on until then. The company declined requests for an interview with him.
Some analysts have suggested that Microsoft could use a seasoned turnaround artist in the mold of Lou Gerstner, who rescued IBM from irrelevance in the 1990s. Current and former Microsoft executives said the company would more likely turn to someone with a technology pedigree. Some pundits have called for Bill Gates, Microsoft's co-founder and chairman, to return to the company, in a nod to how Steven P. Jobs revitalized Apple.
But people who know him said Gates has no intention of doing that because of his full-time focus on philanthropy.
Others believe Microsoft is not governable in its current form. Ben Slivka, a 14-year employee of Microsoft who left in 1999, said the company should split into five independent companies he calls "Baby Bills" devoted to Windows client software, Office applications, servers, Xbox and the Web.
"Give each of them (say) $5B for a rainy day, but not much more," Slivka wrote in a post on Facebook after the news of Ballmer's retirement. "You want them to be hungry. Return most of the cash hoard to shareholders."
That Ballmer announced his plans without a successor in place is puzzling and led to speculation among current and former Microsoft executives that Gates might have been losing patience with his longtime friend, whom he first met when they were students at Harvard University in the 1970s. A spokesman for Gates said he was not available for interviews.
While the board, Ballmer and Microsoft gave no public indication that he was pushed out, the disappointing stock price may have been a factor in his departure. Over Ballmer's 13-year tenure at Microsoft, the stock has lost 36 percent of its value, if the dividends that Microsoft pays out are excluded. Apple, meanwhile, was up nearly 2,000 percent over the same period. With the announcement of Ballmer's departure Friday, Microsoft's stock rose more than 7 percent.
"Microsoft will have to go through a very hard and painful transition," said Joachim Kempin, a former senior Microsoft executive, who has written a book critical of the company under Ballmer. "I'm not very confident the next guy will be able to immediately turn the ship around."
But with no clear successor to Ballmer lined up and a jumble of businesses that will require the skills of a polymath to run, the company still faces huge obstacles to reclaiming its former glory.
While Microsoft in Ballmer's reign as chief executive has yielded the spotlight to more glamorous companies like Apple, Google and Facebook, it still makes some of the biggest money-gushers in the technology business, including its Windows operating system for personal computers and Office applications like Word. Its profit last quarter was nearly $5 billion, compared with $3.2 billion for Google and $6.9 billion for Apple. Anyone who uses a PC to create a resume or a term paper or to do online banking is more often than not doing so on a machine running Windows.
But the PC business, which Microsoft has ruled for decades, is under siege by mobile devices like tablets, an area that Microsoft has stumbled in, and that Ballmer famously underestimated. Analysts say the company needs to act quickly to right itself.
"The walls are falling now," said George Colony, chief executive of Forrester Research, a research and advisory firm. "They may fall very quickly. There's not much time for the board."
Nonetheless, it has given itself a year to choose a successor, and Ballmer, 57, will stay on until then. The company declined requests for an interview with him.
Some analysts have suggested that Microsoft could use a seasoned turnaround artist in the mold of Lou Gerstner, who rescued IBM from irrelevance in the 1990s. Current and former Microsoft executives said the company would more likely turn to someone with a technology pedigree. Some pundits have called for Bill Gates, Microsoft's co-founder and chairman, to return to the company, in a nod to how Steven P. Jobs revitalized Apple.
But people who know him said Gates has no intention of doing that because of his full-time focus on philanthropy.
Others believe Microsoft is not governable in its current form. Ben Slivka, a 14-year employee of Microsoft who left in 1999, said the company should split into five independent companies he calls "Baby Bills" devoted to Windows client software, Office applications, servers, Xbox and the Web.
"Give each of them (say) $5B for a rainy day, but not much more," Slivka wrote in a post on Facebook after the news of Ballmer's retirement. "You want them to be hungry. Return most of the cash hoard to shareholders."
That Ballmer announced his plans without a successor in place is puzzling and led to speculation among current and former Microsoft executives that Gates might have been losing patience with his longtime friend, whom he first met when they were students at Harvard University in the 1970s. A spokesman for Gates said he was not available for interviews.
While the board, Ballmer and Microsoft gave no public indication that he was pushed out, the disappointing stock price may have been a factor in his departure. Over Ballmer's 13-year tenure at Microsoft, the stock has lost 36 percent of its value, if the dividends that Microsoft pays out are excluded. Apple, meanwhile, was up nearly 2,000 percent over the same period. With the announcement of Ballmer's departure Friday, Microsoft's stock rose more than 7 percent.
"Microsoft will have to go through a very hard and painful transition," said Joachim Kempin, a former senior Microsoft executive, who has written a book critical of the company under Ballmer. "I'm not very confident the next guy will be able to immediately turn the ship around."
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