Steve Ballmer's Biggest Mistake: Obsessing Over Google

Steve Ballmer web 2.0

Steve Ballmer’s biggest mistake during his tenure as CEO of Microsoft has been to obsess over the success of Google, while missing the rise of Apple.

In 2008, when the iPhone was just a year old, and the iPad didn’t exist, our own Henry Blodget pointed out that Microsoft was wasting time and effort trying to win Internet media. Since then Microsoft has burned billions on its search engine, Bing, and related online services.

Meanwhile, Apple came back from the dead to become the world’s most valuable company. Today, the iPhone business alone is worth more than all of Microsoft.

If Ballmer hadn’t been so determined to beat Google he would have seen Apple’s rise coming. He would have latched onto the importance of mobile computing. He would have made Windows Phones better. He would have figured out how to make tablets work.

The problem is that Microsoft saw Google’s growing profits. It didn’t see the profits Apple was soon to have.

So, the iPhone became a smash hit. It led to the iPad, which is a smash hit. And the iPad now represents a true threat to Microsoft and its Windows business.

This is why Microsoft just announced that it is going to build and sell its own tablet. This would have been unthinkable just a few years ago. But Apple’s success coupled with the decline of the traditional PC makers has forced Microsoft to scramble to catch up to Apple.

If Ballmer hadn’t been so consumed by the search team in Mountain View, he might not be scrambling.

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