People who say Ballmer is a bad CEO based on the stock price really aren't paying attention. He took over at the height of the tech bubble. Microsoft's PE (and everything else) was a joke. Since he took over revenue and profits have increased by an impressive amount. The only reason the stock has been flat is that it was extremely over inflated when he took over.
(Certainly he has made mistakes, but frankly I think he's done just fine. Windows phone 7-8 have been pretty good, just slightly late. Xbox has been pretty successful. Azure has been fine. Bing has been the only real failure/money loser, but at least it might be holding back Google to some extent. That was the whole purpose anyways.)
Steve Ballmer started at Microsoft in January 2000 [1]. Since then the S&P 500 has gained 15 points, the Nasdaq has lost 12, and Microsoft...about 45 [2]. Thus MSFT has under-performed the S&P 500 by over 60 points and the Nasdaq by over 33.
This does not show that Ballmer is crap. Just that Microsoft has been crap since Ballmer took over. Generously: he has been unable to arrest the disintegration of shareholder value.
UPDATE: Out of the 3 395 overlapping 20 trading day time periods between 7 January 2000 and 19 July 2013 MSFT outperformed the S&P 500 ETF (SPY) in 1 543 of those periods, or 45% of the time. Thus, if you were to flip a coin on any trading day between those dates and, were it to come up heads, buy and hold MSFT for 20 trading days you would, on average, make money on 9 out of 20 days. If you made money you made, on average, 4.9%. If you lost money you lost, on average, 4.6%. Comparable statistics for SPYs are a 59% win rate (3 out of 5 times), 3.2% up, 4.4% down.
Msft had a PE of 58 when he took over. S&P had a PE of 29. Msft was vastly overvalued, there was nothing he could have done that would have made msft go up in normal conditions.
I say Ballmer is a bad CEO because of the stack ranking employee evaluations and the rampant smothering of prototype technologies that later turned out to be valuable in favor of "core" technologies - you know, the two behaviors that are absolutely toxic for a tech company.
I agree with a great many criticisms of Microsoft, but this one always strikes me as nonsensical. I was an intern at Microsoft and (while I never participated in stack ranking) it never seemed particularly destructive. I went on a tour of Valve and one question that was asked during the Q&A was what kind of evaluation and ranking system they used - the answer was stack ranking. Companies have to use some form of evaluation and ranking for their employees once they grow past a certain size - it's just an organizational requirement. The alternative is upper management without quantifiable information about the many people under them, which makes it harder to allocate resources and operate efficiently. Or so I imagine, I'm not in upper management at a very large company, but that certainly seems to be the case pretty much everywhere.
Go through a stack ranking where you get a bad review simply because "there are too many good developers on the team" before you say that it is a nonsensical criticism.
Making employees feel like shit for reasons outside their control is bad management.
Anecdotal, but, I know a bunch of good developers at Microsoft, and I've never heard any one of them complain about that before. They complain about a bunch of things, many of them related to upper management, but that "lost decade" article was the first I heard anyone complaining about stack ranking.
Stack ranking has been used at Microsoft since 2006. Furthermore, he wouldn't be overly involved in deciding performance evaluations. That's more the role of Lisa Brummel, who is the EVP of HR.
> People who say Ballmer is a bad CEO based on the stock price really aren't paying attention
Most of the criticism here doesn't mention the stock price, but since you bring it up...
> He took over at the height of the tech bubble. Microsoft's PE (and everything else) was a joke.
Even if you set your start date as the collapse of the tech bubble in 2002, Microsoft's stock price has remained pretty flat. You might argue that the market was still overvaluing Microsoft in 2002, but perhaps that was because it overvalued the ability of its CEO to grow profits and return cash to shareholders.
> Since he took over revenue and profits have increased by an impressive amount
How much of the increase in profits is due to the Windows/Office cash cow, which would have existed under any other CEO? For the remaining growth in profits, how much money was invested to achieve that growth? After all, any CEO can increase company profit by $1 billion per year - he just needs to put $20 billion in a bank account.
I'm not saying he is a great CEO. I'm saying he was put in an impossible situation and he's done fine. Msft had a PE of 58 when he started. And he gets to follow bill gates. Just like Tim cook. It doesn't matter how well he does, people are calling for his head because he isn't Steve jobs. It's tough to follow a legend. (I also think Tim cook is doing just fine)
I think most people are unconfortable with Balmer's lack of pushing Microsoft in new directions. Not so long ago Blackberry's numbers wheren't bad, they were selling a boatload of devices, clausing new deals all around the world, and pushing these facts as a sign of health. But it just felt wrong because all the good news were about fields bound to die or shrink in the near future.
Balmer as a CEO brings plenty of money, sales are strong, figures are good, but mostly in fields that might as well disappear in the next years. Even things like Office and .NET which should have many years left are so heavily bound to windows that they might as well get silently siloed into niche markets while the current PC market gets disrupted.
(Certainly he has made mistakes, but frankly I think he's done just fine. Windows phone 7-8 have been pretty good, just slightly late. Xbox has been pretty successful. Azure has been fine. Bing has been the only real failure/money loser, but at least it might be holding back Google to some extent. That was the whole purpose anyways.)