June should have been a banner month for Microsoft (MSFT) CEO Steve Ballmer, who had a bevy of new partnerships and products to announce. Yet it’s been a total bust for Microsoft investors.
Shares of the company traded around $34.65 on Thursday, within 30 cents of their close at the end of May. That’s after the company hyped its next-gen Xbox and gave its flagging Windows 8 operating system a massive overhaul. Seeking to catch a bit of Apple’s (AAPL) cachet, Microsoft also unveiled a long-awaited version of Office for the iPhone. Additionally, Bing pushed Google search off the Siri service. Sometime rival Oracle (ORCL) even signed up for a cloud partnership on Microsoft's Azure platform.
How could so much seeming progress add up to so little?
The antiperspirant factor
Well, Ballmer isn’t exactly a master showman – the Internets were alive with some less-than-flattering photos of the CEO on stage at Microsoft's Build conference this week. The possible antiperspirant glitch that led to what seemed to be sweat stains on Ballmer's shirt was just one of a slew of missteps and missed opportunities that detracted and distracted from the many announcements.
The Xbox One was attacked as overpriced at $499 versus Sony’s new PS4 at $399. A new policy to curb used game sales generated a storm of negative reactions and had to be watered down within days.
Critics noted that the new version of Office wouldn’t work on the iPad, probably a more important platform for would-be users than the iPhone. The limitation obviously maintained one of the Microsoft Surface tablet’s few unique advantages over the iPad. But the failure to put one product at risk – and a struggling one at that – in order to expand the reach of a market-leading product such as Office has been one of Ballmer’s trademark strategic faults.
Bing has been a non-factor since seemingly forever. Tying up with Siri, which has had its own struggles, is unlikely to generate a material gain at Microsoft’s online division, which reported an operating loss of almost $1 billion over the prior nine months.
Some analysts were scratching their heads over the Oracle deal, which didn’t include key details such as pricing. Oracle then moved on quickly from Microsoft, announcing deals with Salesforce.com (CRM) and NetSuite (N).
Overall, the muted reactions among investors also reflect deep-seated doubts about whether Microsoft will ever regain the momentum and market strength it had in the 1980s and '90s.
It’s also possible the market was anticipating some or all of the announcements. Despite the flat performance in June, the stock was already up 30% this year through the end of May.
But, after having offered investors a peek at all the company’s latest and greatest offerings, Ballmer may be unable to do much more.