Is it Time for Microsoft to Replace Ballmer?

It’s been over ten years since Steve Ballmer stepped into the CEO position at Microsoft, and since then, he’s retained a lot of control over the company’s direction. With the major success of select Windows releases, not to mention the Xbox and other Microsoft entities, it’s hard to refer to Ballmer has a complete failure. In recent years, however, many are starting to wonder if he’s still fit to head the company, with a hedge fund manager being the latest to tell Microsoft that “it’s time”.

Speaking at a research conference, Greenlight Capital president David Einhorn stated that, “His [Ballmer’s] continued presence is the biggest overhang on Microsoft’s stock.” He then went on to cite that Microsoft failed to become a demanding power in either the smartphone or tablet markets, that it missed the boat on social networking, and hasn’t been much of a force with search (though a partnership with Yahoo! does seem to be working out well).

Other failures have included the Kin phone, Zune media player and marketplace, and cloud-related applications. As one example, while it’d be expected that Microsoft would be ahead of the curve where online Office applications are concerned, competitor Google has had options available for a while, whereas Microsoft still hasn’t released its own solution to the public (it remains in a semi-closed beta state).

Given all this, it’s not hard to understand the angst against Ballmer, but in the past couple of years, he helped release an obscenely successful version of Windows, 7, and with its Skype purchase, looks to change the perception of others with regards to the company’s focus on social media and cloud apps. Plus, with Windows 8 set for launch either late this year or early next, Microsoft could be setting itself up for another major win.

An important question is that if Ballmer was ousted, who would replace him? If he was to step down, that would leave the company in a very different position than it was a couple of years ago, when both Gates and Ballmer were both heavily involved in the company’s focus. But, it doesn’t seem Ballmer has much to worry about at this point, as Microsoft, including Bill Gates, continue to support him.

Many in the investment community see Microsoft’s shares as undervalued. Einhorn himself is a proponent of the stock but believes it hasn’t performed well as an investment because “Microsoft isn’t getting credit for some of its achievements and prospects,” the Journal quoted Einhorn as saying. “Microsoft’s business has been much stronger than the average company in the S&P in the past five years.”