Ballmer: Time up for 'stuck in the past' Microsoft CEO?

Saved by the Bill, for now

He's also more than some anonymous portfolio jockey or every day stock analyst: Einhorn is feted as the person who rumbled Lehman Bros as being under-capitalized and over exposed.

Is the clock finally ticking on Ballmer?

Earlier this year, the FT reported rumblings on Microsoft's board about Ballmer's leadership. "He is coming under greater pressure [from the board] to raise the company's game," the FT claimed.

Only, it seems, Skype wasn't what the board exactly had in mind and it took Bill Gates, a fellow board member, to swing for Ballmer and help convince the others to approve the deal. Gates' comments reveal Ballmer was alone on the board over Skype, and that it took the considerable influence of Gates to sway people.

Until Skype, Ballmer was reasonably safe. While the stock's not going north, he is CEO of a company that makes more than $60bn a year. At $8.5bn and with a board clearly not 100 per cent behind Skype, Ballmer's now out on an even bigger limb than before when he didn't buy Yahoo! and when he laughed off Apple's iPhone that Microsoft is now trying to copy.

"Spending $8.5bn in cash on a loss making web telco based on a theory of making money will be Ballmer's last role of the dice"

With an online business stuck in the red and with Microsoft spending billions just to catch up in search and on mobile phones, $8.5bn in cash punted on a loss making web telco based on a theory of making money will be Ballmer's last role of the dice.

That said, Einhorn's comments at this stage are more annoyance than problem. Greenlight holds just nine million shares in Microsoft, or 0.11 per cent of outstanding stock, according to Thomson Reuters, a fact that means Greenlight lacks the power to actually oust Ballmer should it wish to.

At Sun Microsystems, when Southeastern Asset Management decided it was time for a change, it increased its ownership stake from 17 per cent to 22 per cent, to become Sun's single biggest shareholder. From there, Southeastern secured the appointment of two new board members to the old 11-man board, and shortly after Sun was put up for sale.

Greenlight could also become active: it could rally other disgruntled shareholders – of which there are many – and they or Greenlight could mobilize to increase their share ownership to force the changes they want – just like Southeastern Asset Management at Sun.

Potential allies are waiting in the wings. The Crandrea Group had attempted a grassroots shareholder activism movement before but that came to nothing. According to Crandera, it's not given up. "We have been engaged in other projects that have consumed time and attention," it said. ®