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Despite Pressure, Microsoft Declares It Won't Split Divisions

Posted by Kachina Shaw Mar 5, 2008 3:49:25 PM

CFO Chris Liddell says Microsoft is not thinking of splitting its divisions in any way, says InformationWeek. The synergy is there, says Liddell, even if the European Commission and other regulatory bodies think customers would be better served by a goverment-led separation of segments of the whole. After last month's record $1.35 billion fine from the EU's antitrust board, the question of the lifespan of Microsoft as behemoth is being raised anew. That antitrust board is working on a fresh investigation, begun in January, of Microsoft's competitive practices regarding several of its products. At the same time, Microsoft's offer to purchase Yahoo is still on the table, an acquisition that -- if by some long shot accepted -- would trigger additional regulatory examination and quite possibly mandated splitting of divisions.

 

Presumably, the CFO is part of the strata of management at Microsoft that IT Business Edge blogger Rob Enderle references in a couple of his recent postings about the company and the significant changes it is going through right now, from the outside in, and from the inside out. One could also presume that the CFO's statements on the company's continued resistance to separation of divisions was vetted by Steve Ballmer, but Ballmer is the one exec that Enderle, among others, calls out as being a bit out of touch with consumers and even with some of the markets in which his company is a major player.

 

Maybe this is one decision that is going to be taken out of the hands of management at Microsoft, or given up through moves like an offer to acquire a fellow tech giant like Yahoo.

 

The InformationWeek piece mentions what Microsoft will not become: "a Berkshire Hathaway-style holding company." The reference caught my eye because I've also been reading Fortune's piece on the top 20 most admired companies in the U.S. Microsoft takes spot 16 this year, among companies identified as admirable by execs and analysts surveyed in a variety of industries. Once it's all pared down to bite-size facts and figures, Microsoft's leading strength continues to be profitability and growth. Never mind that Apple comes in at number one and a top innovator, or that Google is at number four and is seen as fulfillings its "do no evil" motto.

 

But those comparisons are tired. Microsoft has money in the bank and knows how to make more, in poor or healthy economic environments. Perhaps Steve Ballmer should emulate Warren Buffett, and Microsoft actually should consider for its next stage emulating Berkshire Hathaway, which comes in at number two in the list, by building on its established brand name, market positions, and bottom-line strengths and focusing on the long term, rather than the short. The benefits could include not only reduced regulatory pressure and fines, but continued rising revenues and the elusive admiration that seems to be so easily garnered by Microsoft's peers.

Add a comment Leave a comment on this blog post.
Apr 9, 2008 10:50 AM Guest Kevin  says:

Why isn't apple being torn apart or fined for Anti-trust? Heck, they  have their own OS, hardware and software and sell that as a package. If Microsoft did that, they would get torn apart and fined a few billion dollars more. If Microsoft had control over the hardware that was being used by it's OS, I'm sure it would be much more stable compared to Mac. We wonder why the Mac OS runs so well... they can focus on limited hardware it needs to support. They don't have to accommodate the flexibility of as much hardware. Basically the EU is saying ... don't be too successfull at what you do or we will fine you.

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