Closing Windows
If I owned Microsoft stock, I’d strongly consider selling. Like, right now.
This isn’t because of any great fears about the stock market in general. Lately, I’ve been buying a little stock. And it isn’t because of my long-standing ambivalence toward Microsoft, which stems from my background as an Apple user since 1982.
No, I would sell Microsoft because I think the Third Wave 2.0 is about ready to wash over it.
(In his 1980 book “The Third Wave,” Alvin Toffler posited that the First Wave was the settled agricultural society that replaced hunter-gatherer cultures; the Second Wave was the industrial age society; and the Third Wave was the post-industrial, or information-based, society. I think we’ve already seen a lot of that — and now we’re in the first shakeout, or Third Wave 2.0.)
Problems come in threes, goes the saying. Here are Microsoft’s:
- For the first time, sales of Windows are down. This is at the same time that world demand for “netbooks” is going to skyrocket. What are netbooks? They’re small, cheap, portable computers that retail for about $300. These are the machines that will get outer Mongolia online, and the projected adoption rate is staggering. How easily will Microsoft be able to sell an installation of Windows onto these machines for $100, when the machine itself costs only $300? Not easily. Especially when Linux is free.
- Microsoft was famously late in recognizing the possibilities of the Internet. Google owns the search-engine business that could have been Microsoft’s, and the Yahoo deal didn’t happen. Now Gmail is going to eat Outlook’s lunch. If Google controls the search business, and Firefox rules the browser world, and Google (again) takes over email, what’s left online for Microsoft?
- Problem #3: pessimism. Yes, I have heard the rumor that the economy is bad. But do I think it’s going to permanently “reset” at a lower level? That’s what Microsoft CEO Steve Ballmer thinks. Really? Even with continued population growth, and new economies coming online all over the world, it’s going to be smaller? Or is it just that Microsoft won’t be able to adapt to new realities? “Perpetual optimism is a force multiplier,” Colin Powell famously said. (And no, I don’t think he was prescribing a Candide-like naivete.) The opposite is certainly true: pessimism is draining. I suppose such sourness is understandable, coming on the heels of Vista’s grand kerplunk, and those bad commercials with Jerry Seinfeld and Bill Gates buying shoes. But still.
I don’t know what Microsoft is going to do from here on out, except lose market share. (Especially to Google.)
By the way, I would sell Apple stock, too, if I still had any. Not because I think they’re falling behind or screwing up. I’d sell because the performance of the stock market relies upon perception, and whether or not it’s true, the perception is that Steve Jobs is Apple. That’s the downside of running a personality cult: There’s trouble when the personality proves to be all too mortal.