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In Ten Years: Microsoft


The company didn't just lose a deal, it lost its vision.


10 Companies in 10 Years 2007 was in many respects a forgettable year for Microsoft (MSFT). What should have been a shining moment for the software giant -- the long awaited release of the Vista operating system -- was instead marred by missteps, failures, security flaws, bugs and increasing competition from upstart Google (GOOG). And to think, those were the good ol' days.

By 2012, a series of drastic miscalculations had left the once-proud Microsoft struggling under the weight of its global operations and vying for relevancy in a new age of Windows-less mobile computing.

That year's Vista upgrade, Chrysanthemum, was disastrously unpopular. Few could pronounce it. Even fewer could spell it. And the holographic features designed to add a "spatial element" to mobile computing and entertainment functionality instead triggered widespread panic and hysteria. Some complained of seizures triggered by the relentless strobe effect - caused by an application freezing while in hologram mode.

Others suffered more quietly, trapped in silent stoicism, certain they were having LSD flashbacks, but too nervous to file a formal health complaint and divulge their dark secret to a spouse or friend.

Still, the reality for Microsoft is that Chrysanthemum was merely emblematic of sluggish failure, not a harbinger of it. If there was one singular event, one critical mistake that sealed the former behemoth's fate, it was its ill-timed bid for Yahoo (YHOO) in 2008 - smack dab in the heart of the deflationary debt unwind.

Then-Microsoft CEO Steve Ballmer was widely praised for "sticking to his guns" and not acquiescing to the weakened Yahoo's demands. But with the benefit of hindsight, it's clear Ballmer's gambit was little more than an act of reckless hubris and a fundamental failure in strategy.

Microsoft wanted to be a media company. Yahoo was a natural partner in that pursuit. It turns out that by failing to come to terms, Microsoft didn't just lose a deal, it lost its vision.

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