“As Microsoft continues to press its takeover bid for Yahoo, Microsoft’s shareholders might be interested to know more about the deal-making history of Microsoft’s chief executive, Steven Ballmer. According to an academic paper that looked at ‘serial acquirer’ chiefs, Mr. Ballmer’s early track record for creating value through acquisitions was pretty dismal,” Andrew Ross Sorkin blogs or The New York Times.
Sorkin reports, “But the working paper, whose lead author, Richard Roll, is a professor at the UCLA Anderson School of Management, also gave a reason to be hopeful: It found evidence that chiefs who make value-destroying acquisitions early on can learn from their mistakes, improving the returns for shareholders in subsequent deals.”
MacDailyNews Take: Richard Roll? Yeah, right, Sorkin. We’re not falling for it this time! Everyone, it’s very important that you watch this short video now.
Sorkin continues, “Called “Learning, Hubris, and Corporate Serial Acquisitions,” the February 2007 paper examined 2,589 chief executives during the period between 1992 and 2002. Out of those, 1,424 chiefs oversaw at least one acquisition.”
“Mr. Ballmer was considered a “hubris-infected” chief under the study’s definition, because of Microsoft’s value-destroying deal to invest $100 million in Vertical Net in 2000. He followed up with deals for Intertainer and BroadBand Office, which also generated below-market returns for shareholders,” Sorkin reports. “In all, Mr. Ballmer made 15 deals between 2000 and 2002, with an average market-adjusted shareholder return of negative 4.59 percent.”
Full article here.
MacDailyNews Take: Steve Ballmer is an excellent CEO, heh, who is making the right decision to go after Yahoo, heh heh, as such an acquisition can only provide wondrous, hee hee! ha ha!, and magical, *snort!*, HA! HA! HA! HA!, ahem, synergies to… aww, forget it. We tried.
OMG look at that image. Perfect! LOL
That pic cracks me up :XD
Say everything about Ballmer and Microshaft – ‘money grabbing and leaching bastards’.
Say bye bye to Yahoo if M$ get there greedy hands on it.
Be careful whom you denigrate implicitly or otherwise. Richard Roll, PhD, University of Chicago, has a distinguished record in financial economics.
@Jubei
It is perfect. All he needs is a Dr. Evil outfit. Only if I was good at photo editing!
Some mental illness at Microsoft. You have Gates saying that Windows 7 will be out next year or so (or so meaning 3 years+), and you have Ballmer thinking Yahoo is the golden goose.
They seriously need to focus on their primary thing. Software. Get Windows working right. Vista is terrible. Fix it. Now. That should be job ONE at Microsoft. All their funds and focus should be on that, not acquiring Yahoo.
Congratulations, Mike!
You win the “Retard of the Day” award for Tuesday, April 8, 2008!
You can pick up your drool cup any day between 9am and 5pm at your local Safeway.
Crap, I’ve been rickrolled yet again.
Thanks, MDN.
I haven’t looked that deeply into this, but acquisitions and investments are often made to prevent competition for occurring. So these may have been “good” investments for Microsoft after all.
Remember, Microsoft has been successful largely by making other people unsuccessful. It’s hard to believe that wouldn’t play into their acquisition strategy as well.
This merger makes absolutely no sense. Yahoo isn’t doing that that great. If Microsoft can’t make their own online service work – MSN or whatever it is – how in the heck is acquiring Yahoo (that isn’t doing so great) going to add up to improvement. It isn’t.
I applaud Yahoo for holding out for more money – I hope they get lots of it. Make MS pay through the nose. Then – Get out and watch MS burn down from a distance. Ha ha ha.
Do you think that when Ballmer looks in the mirror in the morning he tries to make a light bulb glow by putting in his mouth?
“hubris-infected serial acquirer”
If by hubris-infected you mean as full of wind as a corn-eating horse and by serial acquirer you mean he routinely unhinges his jaw while tipping over the breakroom refrigerator.
@snappytow
The primary champion of self-powered lighting:
http://macdailynews.com/index.php/weblog/comments/10339/
I wonder if somebody hasn’t documented all the acquisitions, then added up all the lost employees of said acquisitions, then given the final total of what MS has done to the corporate business world.
“Microsoft, we layoff more people than any other company”
That’s a comforting footnote.
@ Always Brings a Smile Though
That will be what MS Shareholders will be saying 10 days after Ballmer close a Yahoo deal, ending up paying a lot more for it then first planned. Ballmer will orders all of Yahoo infrastructure be converted to Windows and all mention of Yahoo be removed from everywhere and everything. All the employees will flee and MS will move everything that’s left of Yahoo to Redmond within 6 months.
In a year tech writers will be what happen to Yahoo? Oh, they when belly up and MS bought them for a bargain price. For getting that MS paid big bucks then sucked Yahoo dry without MS showing any real value for the premium price that they pay.
MS Stock will still be the same price it is today (+/- a few bucks).
“This merger makes absolutely no sense.”
Like that matters! When you grunt, point and have a few billion in the bank, you get people’s attention. Folks are too afraid to go out after dark in Redmond.
MDN are you sure that picture of Ballmer wasn’t photoshopped? How could someone look THAT bad?
Baller’s in trouble, It’s been found that many Monkey’s are now using tools. Soon, they’ll start using leaves for money. Once that happen they will be 1000% more intelligent then Ballmer.
@Mike
Is that a threat?
Rick Roll – lol
That’s actually Rick Astley, one of the numerous UK ‘soul’ singers
waaaay before Joss Stone or Amy Winhouse.
Anyway, Do Microscoff shareholders actually make money? Is investing in an unwise CEO smart? What are they thinking? I understand stocks are really a game, but is it possible to increase stock prices by a Yahoo acquisition, then sell immediately, then when it goes downhill, buy more stock at a cheap price and repeat. Highly unethical to me, but is that how they make their money? Honestly, can someone answer or am I crazy? This is the only logical way I can see anyone profiting.
OOps! I spelled Amy’s name wrong –
Amy Crackhouse
there – all better
The hyena is stalking the herd and has identified the weakest member.
This is not an acquisition – it is the decapitation of a competitor.
Looking at Ballmer’s belly I think the UCLA professor was wrong. Ballmer was indeed a very good cereal acquirer.
Let’s just imagine if only 2 billion dollars instead of 40 billion was put into their next OS and Office…how much more secure their future would be…but not a chance. Apple’s next OS should be called Terminator.
I don’t understand all the negativity about this deal. I for one can’t wait for MSFT to blow out their cash reserves and lower the value of their stock for a piece of shit like yahoo.
I hope the merger drags them both down the toilet.
It is perfect. All he needs is a Dr. Evil outfit.
And the caption: “45….billion….dollars!!”.