ballmer

Microsoft CEO Steve Ballmer just finished speaking at the company’s annual shareholder meeting — his final one as the company’s leader — and while he didn’t directly address calls for the company to spin off its Xbox and Bing businesses, he called out those divisions as key parts of Microsoft’s broader vision.

Referring to the new Xbox One, he cited the integration of products including Bing and SkyDrive as examples of the unified strategy that is bringing together the company’s various devices and services. Microsoft this morning released new details about how Bing will integrate with Xbox One for natural language search in the new console.

Xbox One is “a reflection of what is possible when a company, our company, is unified under a common vision,” Ballmer said. He also noted that Bing is key to helping test and improve the company’s Windows Azure service.

Ballmer talked about the company’s pending Nokia Devices & Services acquisition, which Nokia shareholders approved this morning.

gatesboard
Bill Gates in the front row with other members of the Microsoft board.

“This is really a signature moment in the transformation of the company,” he said, predicting that the deal will accelerate Microsoft’s position in Windows Phones, tablets and PCs, by bringing Nokia’s devices teams aboard.

He concluded, “Microsoft is uniquely positioned to drive and define the next big thing.”

The first shareholder question from the audience was about acquisitions, encouraging the company to be more cautious about spending billions on big deals. Ballmer acknowledged the need to be careful, but also said that “bolder plays” can be necessary at times.

“Now, bigger acquisitions should be done with great thought and caution,” he said. “Certainly our aQuantive acquisition is not going to go down in the record books as a success. It wasn’t, and I take responsibility for that.”

Bill Gates is not on the stage for the Q&A period, instead sitting with other members of the Microsoft board in the front row. The Microsoft chairman earlier gave opening remarks to shareholders and choked up when talking about Ballmer’s impending departure and the company’s future.

On the question of privacy and security, Microsoft general counsel Brad Smith said this in response to a shareholder question:

“We all want to live in a country and a world that’s safe and secure,” he said. “But it is a business imperative that we maintain our customers’ trust in every country of the world. We’re focused on engineering improvements that will further strengthen security, including strengthening security against snooping by governments.

Without citing Google by name, he noted that Microsoft doesn’t scan email or files to deliver ads.

The final question was fitting: Why isn’t Microsoft’s share price going up? Ballmer responded by citing a disconnect between profits and the share price.

“Our stock price is 60% of what it was when I took over as CEO and profits are three times,” he said. “I trust the company will continue to focus in on what’s real, which is long-term profit creation.” If that happens, he said, “the share price will go up. I feel confident about that.”

Comments

  • Guest

    Xbox and Bing/MSN search were sold to shareholders as major new sources of future profit. That was the carrot that was used to justify the tens of billions in losses. A decade later neither has even broken even on a lifetime basis far less become a significant source of new profit. Now Ballmer wants to ignore that and instead argue they should be kept because they add some unspecified value to the overall. I doubt ValueAct and others are going to be swayed by that. All we have here is a failed CEO defending his legacy. It’s neither surprising nor compelling.

    • rayburt456

      Maybe that is why Gates was crying.

      • Ben A

        was that supposed to be? Funny. Joke is more epic fail than Sony bricked console.

        • Stevie Ballcheese

          Lowest launch failure rate in the history of gaming consoles. Plus a PS4 that won’t boot up is still more powerful than a “fully functioning” Xbone.

          Microsoft has failed.

          :D

          • wormywyrm

            No, actually it is probably going to be the highest failure rate. Sony already admits 1%, independent sources say 10% is possible and its been only ONE WEEK. PS4 is supposed to be the console ‘for the gamers’ but it has less launch games and lower ratings on its launch titles than X1. Have fun with your fake facts and snide nicknames.

          • Atmos_Duality

            Historically, launch titles are largely garbage.
            It’s not that big of a deal for Sony if it has a rocky start for its games. The PS2 suffered the same and went on to become the best selling console of all time.

          • You are flat out wrong

            And a few days after launch, the hardware quibbles got ironed out and Xdrone wailing subsided. So much for that. What now? Maybe try and hype that disaster Ryse again.

          • Atmos_Duality

            Never underestimate the stupidity of the largely ignorant consumer mass. Their ignorance alone can move mountains and validate otherwise terrible products on the market.

    • Ben A

      according to your bullshit sources. Ballmer is the biggest shareholder of Microsoft of all share holders. ValueAct cant do shit to Microsoft. I heard all that bullshit, “neither surprise nor compelling” you wont be saying that in the next few years, believe me. You have no clue about Microsoft

      • Guest

        Ballmer isn’t MS’s biggest shareholder. He’s not even its biggest individual holder. And ValueAct already got a seat on the board and very likely played a key role in Ballmer’s surprise “retirement”. Your lack of civility is only exceeded by your ignorance of the subject matter.

    • amnong

      palm to forehead – Microsoft should just choose you as CEO instead of messing around and having incompetent people leading the company. Clearly you’d do a much better job, Mr. anonymous!

      • Guest

        Wow, that’s so impressive. You can’t debate the facts, so instead you resort to an ad hominem attack.

        • amnong

          For one I don’t stay anonymous and claim he’s a failure. Here’s one thing to look at – how much did revenue grow under Ballmer?

    • miffy900

      Bing sucks. There I said it, but no new incoming Microsoft CEO should kill it off. Same with Xbox. They are assets, but their value to the company and indeed the industry at large, is hidden beneath the pretty lame ways Microsoft has managed and executed them over the years.

      If anything, Bing should be kept on if only for one thing only and that’s to keep Google honest. Sure Google has 85% of the search market globally, but what happens when Microsoft gives up, and Bing is gone? Google will have more than 95% of the market against an impotent Yahoo! and we’ll live in a truly worse-off Internet (in fact, Yahoo! would probably disappear in that scenario as well, because its search is powered by Bing).

      Now with that said, any new Microsoft CEO still needs to affect change; because the status-quo with Bing will not suffice to compete long-term against a competitor like Google. Ask Apple and they will tell you better than anyone, you can barely compete against, let alone keep honest, a near monopoly-player like Google, when you only have 10% marketshare worldwide.

      Complaining to anti-trust authorities about Google will not do anything for Microsoft, because firstly, no one takes Microsoft seriously when it tries to call out anti-competitive practices of its competitors, and secondly, Google got its monopoly by virtue of having a really good product – it’s hard for Microsoft to accept this, but its the truth, Google is still the only choice for hundreds of millions of users out there because its search engine is really good.

      One thing is certain now, Bing has real strategic value that goes far beyond just making money for Microsoft; but at the same time, Microsoft needs to do more with Bing than just increase market share by a few % each year and lowering losses by a few hundred million $, because it is not a viable long-term strategy, especially after almost 4 years now.

  • avi

    contrary to what many people think, I believe that ballmer was a successful ceo as he introduced several devices and services that set the road for profits in the future. he was just laying the groundwork and I think we’ll see a ton of that pay off when he leaves.

    • miyamotomusashi94

      no.

    • Erimgard

      It’s been over a decade since he took over and Microsoft’s stock dropped 37% in that time, and all his new innovations are losing out to other companies like Apple.

      The Xbox division is the only ‘new’ idea that really has a good shot of being profitable long term, but it’s still several billion dollars in the red at this point, and they handled the marketing of Xbox One very poorly. But it’s a long console cycle. No need to damn a box that’s not even out yet when plenty of consoles have had controversial launches and gone on to be highly successful.

  • NedReader

    Any CEO that killed the XBOX would go down in history as the biggest bonehead ever. Microsoft wants to be in the living room and they already have some 80 million Xbox users? Why throw that away? Why not leverage that by helping developers write apps that run on computers, phones, tablets and yes, the Xbox.
    Gesture and voice are the next interface revolutions. Apple just bought the company that made the original Kinect – could they have a plan? Microsoft is going in the right direction here and any CEO that guts that endeavor would also go down in the history books as the biggest bonehead ever.
    Google wants to sell Google TVs. Apple wants to sell Apple TVs. Why? To get into the living room. So anyone who suggests that Microsoft sell the Xbox business isn’t thinking clearly in my opinion.

    • miyamotomusashi94

      “Microsoft wants to be in the living room”

      Isn’t windows inside every home, already?

  • The Shambolic Skeptic

    The present and the future is mobile. MS was years late with a modern mobile platform hence they are in a heap ‘o trouble.

    Bing and XBox are hardly the issue.

  • Thomas M Richardson

    This is a bad sign for the Xbox division, Ballmer is trying to convince the company not to sell off that failing division.

  • Thomas M Richardson

    You Xbox fans should just try to convince Microsoft to license out Xbox OS to their hardware partners. They could still support Xbox one, and stop loosing money in manufacturing. At least that way you would not be stuck with a $500 paper weight.

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