Regarding Microsoft and Balmer, Balmer is not a problem -- He's actually a really great business man, and he's turned around or focused a lot of profitability -- What he lacks that Gates had, was *vision*. Which is not to say that he has no vision, but that Gates had a very clear, very bold vision of what the world could be and how Microsoft could be a part of it. Basically, the problem is not that Balmer replaced Gates as CEO, but that no one yet has replaced Gates the visionary. I don't think there's any significant, long-term value in ousting Balmer -- If he were out tomorrow, you would probably see a bump in the stock short-term just on perception alone, but he knows the company and the business well, and it would become apparent over the next several quarters what had been lost. I'd like to see someone like Steven Sinofsky take on that visionary role officially, but I imagine he's already quite influential at his current level.

I used to have that impression, but after watching the recent moves of trying to buy Yahoo ( for a massively over valued amount ), then this horrific purchase of Skype, those levels of epic stupid can only really be hung on the CEO's head. That's the ludicrous part, Ballmer seems to be making desperation plays to try and bouy the stock, when the financials and future of the company are so solid.
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Yahoo! was an overvalued play, and I think the partnership with them worked out better. The Skype deal is overvalued from a P/E standpoint, but I think the key thing to keep in mind is that Microsoft essentially bought a huge user base, and continued leverage in the market, along with a great deal of technology and brain-power. Based of of Wikipedia's Skype article, they last reported (in 2008) north of 500 million user accounts. For the sake of argument, lets (generously) say that about half of those are active, non-duplicates -- or 250 million unique, active users. Microsoft has then paid around $32 per user. Assuming the user base has grown approximately with the number of hours the service has been used, the user base may be closer to twice that, in which case they may have paid as little as half that figure, per user, or just $16. Many companies would *gladly* pay that amount to gain a customer, some would consider it a bargain. Throw in the IP, brains, and momentum/recognition of the Skype brand, and I don't think they overpaid -- at least not grossly so. Skype was likely on its way to knock MS technologies like Lync Video chat, et. all. out of the race, and by purchasing Skype the take the lead and bolster their overall position. Its basically like Microsoft having the opportunity to go back in time and buy Google as it was taking off -- perhaps the the "desperation" of it has something to do with thinking of the situation in those terms, and perhaps they were inclined to pay more than they needed to because of it, but that doesn't make it a bad move, just a sub-optimal one. I also recall something about them using some foreign cash in the deal that was otherwise going unused and would have been penalized if it had been brought into the states as a cash asset, but the details escape me. The one valid object is that MS didn't really need Skype from a technology standpoint, what with several similar technologies and all, but as we've discussed up above, no amount of solid technology or great engineering seems to affect the perception of Microsoft as a company or as a technology provider right now, so perhaps the biggest thing they get out of this deal is having bought a great deal of positive public perception. Anyways, I think that in 5 years we'll look back at the Yahoo! offer as Crazy, and the Skype deal as "Crazy like a fox".

I hold some MSFT, and I am so on the fence about continuing to hold it. I purchased it fairly recently so I am not underwater like many investors, but in a time where other companies that show a glimmer of financial hope go through the stratosphere Microsoft stock continues to flounder. It's so freaking irritating, as all the rules of investing seem to have gone completely out the toilet lately. Microsoft trading at 9.4 P/E ratio is almost criminal given their continued increases in both revenue and profit, especially in this economy! Especially with GOOG trading at 20 P/E with their ongoing proof they can't expand other profit centers... it all just makes no effing sense.

In some part, I think the market is still overly-emotional, carrying over from when the average Joe could get his hands dirty in the market with online brokerage. Most people bet on what they think will get them rich over relatively short periods -- that is, the next hot growth stock, not solid earnings stocks. People that don't look at the fundamentals of these companies are not really investors, but speculators. They're strategy is swayed by stories of people who got rich quick, over night by riding some meteoric stock, and they think that it can happen to them too. As long as dreams and emotion rule, stocks aren't likely to behave in a logical manner.

Taking for example Microsoft, Xbox has taken a solid #2 position in the US Market, and the Wii is fading quickly. XBox Live is hugely successful and very profitable. Office continues to be Huge. Win7 was a huge success, after the Vista flop. Kinect is hugely successful, and I would argue the best motion-gaming technology in the market (in other words, its got more legs than Move or WiiMotion+) -- fastest selling consumer entertainment device, ever. Windows Phone 7 faces pretty stiff competition, and the encumbant iPhone, but has nevertheless garnered great reviews from critics and customers, and frankly has pretty darn good usability, speaking from personal experience. The Mango refresh just hit all devices, and a lot of key elements, like the browser, are hugely improved. The Fall Xbox update will bring IPTV and tons of other content to Xbox, further solidifying its place as the digital hub of the living room. They continue to have the best development tools and developer experience anywhere. In short, Microsoft, for all its past follies, and perhaps some current ones, has executed incredibly well in a number of areas, and sooner or later the general public is going to realize it. I recently converted from contract to full time, and received some stock options as part of my compensation -- I don't have delusions of the stock price doubling any time soon, but I do think that those shares are going to be significantly more valuable when they are assigned, than the price I locked in shortly after I started.

There are people at Google who fall into that camp, sure; the Dart crew seems to be among them. But the company, holistically, isn't about driving forward technology or benefiting developers or even building a great ecosystem. It's about search and ad revenue, probably to its detriment.

He is also woefully dismissive of the power of the accident, the simple being at the right place at the right time. For example Apple very much does not get it. They got lucky and adapted quick, but Apple is horrible at building a platform. They make these wonderful devices, and a good ecosystem around it, but their platform stuff is shit. Building the company around iTunes? Argh. iTunes in general? How many failed "Apple in the cloud" products have we already seen? 3, or is it 4? Only just now do they seem to be approaching a 1.0 product. And ascribing the App Store to Apple is a joke to anyone with a vague grasp of history... the iPhone shipped with no SDK and no intention to release an SDK. It was going to be web apps only, and poor bastards stuck with a pre-3g iphone are still stuck with that. Market forces created the App Store and release of a native SDK, not some grand Apple strategy.

In some ways I think you might be doing Apple's platform strategy a disservice by treating it as a static entity - reaction to market forces is an essential part of any strategy.

Why did the original iPhone launch with web-apps only? They needed to get to market in a hurry. Why did the 3G come with a native SDK? Apple adapted to market pressure for native apps. Why were iPhones/iPads originally tethered to iTunes? Momentum: it was a convenient platform, since it already had similar support for iPods. Why is the latest iOS wholly independent of iTunes? Adaptation to the reality that not every potential iPhone/iPad customer wants to keep a PC nearby.

I could go on, but I think you get the gist of it - many of the decisions that strike us as crazy in hindsight, are the result of well-meaning attempts at innovation (i.e. web technologies weren't ready to replace native apps) or cost-cutting (i.e. re-using iTunes as a platform). The fact that they have so successfully made adaptations to rectify their own failures, counts towards them in my book...

[quote name='Serapth' timestamp='1320277054' post='4879935']
He is also woefully dismissive of the power of the accident, the simple being at the right place at the right time. For example Apple very much does not get it. They got lucky and adapted quick, but Apple is horrible at building a platform. They make these wonderful devices, and a good ecosystem around it, but their platform stuff is shit. Building the company around iTunes? Argh. iTunes in general? How many failed "Apple in the cloud" products have we already seen? 3, or is it 4? Only just now do they seem to be approaching a 1.0 product. And ascribing the App Store to Apple is a joke to anyone with a vague grasp of history... the iPhone shipped with no SDK and no intention to release an SDK. It was going to be web apps only, and poor bastards stuck with a pre-3g iphone are still stuck with that. Market forces created the App Store and release of a native SDK, not some grand Apple strategy.

In some ways I think you might be doing Apple's platform strategy a disservice by treating it as a static entity - reaction to market forces is an essential part of any strategy.

Why did the original iPhone launch with web-apps only? They needed to get to market in a hurry. Why did the 3G come with a native SDK? Apple adapted to market pressure for native apps. Why were iPhones/iPads originally tethered to iTunes? Momentum: it was a convenient platform, since it already had similar support for iPods. Why is the latest iOS wholly independent of iTunes? Adaptation to the reality that not every potential iPhone/iPad customer wants to keep a PC nearby.

I could go on, but I think you get the gist of it - many of the decisions that strike us as crazy in hindsight, are the result of well-meaning attempts at innovation (i.e. web technologies weren't ready to replace native apps) or cost-cutting (i.e. re-using iTunes as a platform). The fact that they have so successfully made adaptations to rectify their own failures, counts towards them in my book...
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Keep in mind, I was addressing Apple under the lens of the article ApochPiQ posted. It was a rant about how Google doesn't get platforms, mostly because their divisions don't work together nor support good web services ( and that their developer support is crap, which I thoroughly endorse! ), then he went on to say that Microsoft get platforms ( they do ), that Amazon get platforms ( they do ) and that Apple get platforms ( they dont ). The whole context was that it was a cross corporate directive, in Apple's case it was very much not, it was a very organic and evolved process. I am not saying Apple is bad, I am just saying they have shit for a cohesive platform strategy and are very much a silo'ed organization, although it seems to be improving.

The whole context was that it was a cross corporate directive, in Apple's case it was very much not, it was a very organic and evolved process. I am not saying Apple is bad, I am just saying they have shit for a cohesive platform strategy and are very much a silo'ed organization, although it seems to be improving.

Yes, that seems entirely reasonable. I'm still not sure why Apple is perennially lumped in with the 'shit developer tools' group though - I don't use them very often (focussed on Windows/linux-centric development lately), but every time I land in Interface Builder I breath a sigh of relief... Even XCode as a whole, while it may not match Visual Studio in debugging and code completion, is a very capable and user-friendly IDE.