Bill Gates: No Longer Geeky Enough for Microsoft

Bill GatesSome in the tech world were surprised when three Microsoft investors called for the ouster of company chair Bill Gates. Others note that despite leaving the company in 2000, he still exists in the body of Steve Ballmer. Whether Gates makes his exit or not, the call came because he’s no longer geeky enough for Microsoft.

Gates, co-founder and chairman, started the company 38 years ago with childhood friend Paul Allen. Ballmer, current Microsoft Chief Executive Officer, met Gates while the two were at Harvard. While still an undergrad, Gates wrote a version of BASIC. It is there the Gates genius lays. In creation.

Microsoft became the go-to for operating systems and holding onto the rights to those systems, a sweet deal. The licensing of MS-DOS made Gates a fortune. And then came Windows and the rest is history. So why is one of the world’s wealthiest men being asked to leave the company he created?

He is no longer geeky enough for Microsoft. If he would just stay out of the business side and keep coming up with ideas that change the world, all would be well. And profitable. But once, he became a multi-billionaire and turned his sights on the Bill and Melinda Gates Foundation, profits at Microsoft slid. And slid some more. Since he left as CEO in 2000 stock prices are down 40 percent.

So is Gates paying the price for hand picking his successor, a college buddy and his mentee? In May of 2012, Forbes named Ballmer the world’s worst CEO. Not only did Microsoft miss the jump on the Internet but also made a huge mistake with Windows 8, a favored project of Ballmer. Ballmer announced his own retirement after 13 years in the hot seat.

Many believe it is the search for Ballmer’s replacement that prompted investors to call for Gates resignation. While Microsoft still makes a boatload of money from Windows and the Office applications, it does not compete in the tablet and mobile markets. For that, the board takes aim at Ballmer and Gates. All is not grim. It is expected that this year, Microsoft will post $17 billion in profit but what the board wants is a fresh face, new blood and a reinvention that invents something.

Once Gates was a board member and no longer glued to a screen inventing whatever we didn’t even know we couldn’t live without, he lost footing. Some board members say privately that his playing a part in the choice of new CEO is an obstacle to the company moving forward.

Gates and Ballmer have essentially veto power over the selection process that not much will change, and the replacement will be cut from the same cloth,” says Jack Gold, an analyst with J. Gold Associates.

Some investors aren’t so sure. Kim Caughey Forrest, senior analyst at Fort Pitt Capital, a shareholder, says, “I’ve thought that the company has been missing a technology visionary. Bill (Gates) would fit the bill.”

Which is what bothers some investors. There is no one of his ilk at the technology table. Once Gates became involved in his foundation full time, little time was left for new languages and revolutions in technology. Privately, it was said they prefer a board that is fully engaged. Eradicating malaria, meeting with presidents and creating new inroads into educating the world’s children occupies more of Gates time these days. Boards generally don’t care for that sort of thing unless profits are sky high.

Gold adds, “If you eliminate the existing chair and limit the influence of Ballmer on the selection process, you’re more likely to get someone that can take Microsoft in a needed new direction. That would be the best outcome, in my opinion.”

Dan Ferris, investment analyst at Stansberry & Associates Investment Research made a prediction. “If Gates announces his resignation, the stock will rally.”

Shareholders on the side of the ouster cite poor capitol allocation as one problem for Microsoft. Under Ballmer’s watch $21.7 billion was spent to acquire aQuantive, Skype and Nokia. AQuantive became a $6.2 billion write-down. Basically, the investors are calling for new blood with a business brain and an influx of new ideas instead of more of the same.

Is it fair? Who knows? But who would have thought there would come a time when Bill Gates was no longer geeky enough for Microsoft.

Written by Linda Torkelson

nypost.com

www.pcworld.com

www.usatoday.com

 

 

 

 

 

 

 

Leave a Reply

Your email address will not be published.