The week in Steve Ballmer: CEO ignores call for his head, talks Windows 8, China piracy and sees Microsoft stock rise

Steve Ballmer's big week: get all the details here

I'm sure every week in the life of Microsoft CEO Steve Ballmer must be hectic, but this one seemed especially interesting, at least from the outside looking in.

For one thing, a hedge fund manager who apparently is pretty influential called for Microsoft to fire Ballmer, saying it's the only way Redmond's long-stagnant stock price will rise again. Calls for Ballmer's head have been going on for years. The amusing thing, this time, is that Microsoft's stock promptly rose 2.3% the next day.

Microsoft and Ballmer typically just ignore calls for the CEO to step down, publicly, and did the same this week. But Ballmer was as vocal as ever on other matters. On Monday, he announced that Windows 8 is coming in 2012

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Although this seems highly likely given Microsoft's usual product release timing, Ballmer's statement caused Microsoft spokespeople to backpedal a bit, claiming there is no official release date. It's no surprise Microsoft officials would downplay talk that a new version of Windows is coming soon. After all, they don't want to give customers a reason to skip Windows 7, especially given that sales are slowing down after a huge first year on the market.

Money is important to Microsoft, as you might expect, and Ballmer's big week also included a complaint that Microsoft doesn't make as much cash as it should in China. Specifically, Microsoft revenue in China is only 5% of its revenue in the United States. And it's not because residents of China buy fewer computers - its because of rampant software piracy. That's what Ballmer said while speaking to Microsoft staff in Beijing, according to the Wall Street Journal.

"Mr. Ballmer rejected the argument, common in China, that many Chinese consumers use pirated software because authentic versions are too expensive," the Journal reported, quoting Ballmer as saying: "I'm not saying everybody in China could afford to buy a PC... but if you can, you could afford the software." (When Chinese President Hu Jintao visited the United States in January, Ballmer told him that 90% of Microsoft software users in China have pirated versions.) 

The Journal further noted that Ballmer "is under pressure to improve the company's financial performance and revive its flagging stock. Microsoft, which lost its crown as the most valuable tech company to Apple Inc. last year, is now in danger of slipping behind International Business Machines Corp."

Back to the controversy over Ballmer's job, it was on Wednesday when a Reuters report said this: "Influential hedge fund manager David Einhorn has called for Microsoft Corp Chief Executive Steve Ballmer to step down, saying the world's largest software company's long-time leader is stuck in the past."

"His continued presence is the biggest overhang on Microsoft's stock," Einhorn said, according to Reuters.

Reuters also noted that "An investor who put $100,000 into Microsoft stock 10 years ago would now have about $69,000 worth."

Einhorn is the president of Greenlight Capital, and "rose to prominence for making a prescient call on Lehman Brothers' accounting troubles before the bank's subsequent collapse."

Although Microsoft stock fell 6% after the announcement of the Skype acquisition a couple weeks, it did rise 2.3% after Einhorn's comments, even though Ballmer definitely still has his job. 

Clearly, Ballmer hasn't succeeded in boosting Microsoft's stock price. The real question is, who could do better?

ZDNet's Mary Jo Foley asks that question in a piece titled "Would replacing Ballmer really goose Microsoft's stock price?" Foley notes that Einhorn didn't say who should replace Ballmer, and says "Even if Microsoft does replace Ballmer in the short term, I am doubtful that the move will please fickle Wall Street analysts who seem to have already decided, in large part, that Microsoft is now more of a Procter & Gamble than an Apple, Google or even IBM competitor."

We made a similar point last year in the article, "Canning Steve Ballmer no Microsoft cure-all." 

Microsoft's biggest failures have come in Internet and mobile, markets where the company is desperately catchup to rivals Google and Apple. But Microsoft still rakes in billions of dollars from Windows and Office sales, and the vast majority of personal computers on this planet use Microsoft software. Microsoft is a success - it's just not enough of a success to please investors.

"Ballmer may be facing an impossible task," industry analyst Roger Kay told Network World last October. "It may be he's not doing a particularly good job, but it may be that no one could. And maybe even Bill Gates couldn't."

Still, he is pretty entertaining as far as corporate CEOs go. For proof, check out: Steve Ballmer as emoticons.

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