Press Esc to close
Sunday 25 June 2017
News updated at 8:58 AM IST

The merger man: Steve Ballmer was notorious for his hits; and, misses

New York, August 24, 2013, NYT: 22:59 IST
Steve Ballmer
With his impending departure as Microsoft's chief executive, Steve Ballmer has put an expiration date on one of the most prolific deal-making streaks in technology over the past two decades.

But that career as a serial acquirer is notable as much for its misses as its hits. And the acquisitions have helped turn Microsoft into a gargantuan technology conglomerate that some investors regard as unwieldy, raising the possibility that Ballmer's successor will sell businesses, not buy them.

During Ballmer's 13-year tenure, Microsoft has purchased 149 companies, according to data from Standard & Poor's Capital IQ. Most transactions were for well under $1 billion. But some were blockbusters, notably the $8.5 billion acquisition of Skype in 2011 and the nearly $6 billion takeover of aQuantive in 2007.

With the deals, Microsoft moved into new business areas, from videomessaging to digital advertising to social networking. The new operations supplemented the software pioneer's traditional strongholds, the Windows operating system and the Office suite of apps.

Should Ballmer's successor choose to pick up the merger baton, he or she will have plenty of resources on which to draw. The company had $76.2 billion in cash and short-term investments as of June 30, a formidable war chest by any standard. Some analysts contend that future Microsoft deals may go toward selling businesses, however. Richard Sherlund of Nomura Securities suggested in late May that the company could sell its Bing search engine or Xbox home entertainment division to focus on its core products.

Under Ballmer, Microsoft has also made a number of other investments meant to shore up strategic allies, including taking a nearly 18 per cent stake in Barnes & Noble's e-reader business and lending $2 billion to help support Dell Inc.'s sale to its founder.

And Microsoft joined Apple, BlackBerry and others in a collective $4.5 billion bid for patents held by the defunct Nortel Networks two years ago. The unusual move was meant to keep the cellular networking patents available to the entire industry and trumped a competing offer by Microsoft's archrival Google.

Some purchases appear to have borne fruit. Microsoft has busied itself integrating Skype into core products like Windows. The videomessaging service has grown under its new parent, with $2 billion in sales expected for the current fiscal, from about $800 million two years ago.

And Microsoft's $1.2-billion takeover of Yammer last year allowed the company to add social networking to its corporate software offerings, while bolstering the service's customer base to nearly 8 million users from around 5 million.

But many of those deals have proved expensive follies. Last summer, Microsoft took a $6.2 billion accounting charge tied to its takeover of aQuantive, essentially writing off the acquisition of the digital advertising firm as a costly mistake.

Go to Top

Photo Gallery
India's Prime Minister Narendra Modi, left and Portuguese Prime Minister Antonio Costa speak...

India's Prime Minister Narendra Modi, left and Portuguese Prime Minister Antonio Costa speak...

Shiv Sena workers protest against and torch the photos of separatist leader Mirwaiz Umar Farooq...

Shiv Sena workers protest against and torch the photos of separatist leader Mirwaiz Umar Farooq...

Police escort escaped prisoner Sayed Mohammed Said from India folowing his capture and return...

Police escort escaped prisoner Sayed Mohammed Said from India folowing his capture and return...

People revel in, and birds flock fly about the high tide at the Marine drive, in Mumbai on...

People revel in, and birds flock fly about the high tide at the Marine drive, in Mumbai on...

Hindu devotees give money to a decorated elephant outside the Jagannath temple on the eve of the...

Hindu devotees give money to a decorated elephant outside the Jagannath temple on the eve of the...

Demonstrators walk behind a police officer during an anti-fascist march, in central, London...

Demonstrators walk behind a police officer during an anti-fascist march, in central, London...

A burning stunt man can be seen during a press viewing of the Stoertebeker Festival on the...

A burning stunt man can be seen during a press viewing of the Stoertebeker Festival on the...

A Dassault Rafale fighter takes part to a flying display during the 52nd Paris Air Show at...

A Dassault Rafale fighter takes part to a flying display during the 52nd Paris Air Show at...

Jools Holland performs on the Pyramid Stage at Worthy Farm in Somerset during the Glastonbury...

Jools Holland performs on the Pyramid Stage at Worthy Farm in Somerset during the Glastonbury...

People move around themselves fire's torch during the San Juan night in the small Pyrenees...

People move around themselves fire's torch during the San Juan night in the small Pyrenees...

Like us on Facebook

Copyright 2017, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bengaluru - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523
Powered by Yodasoft Technologies Pvt. Ltd.