March 28, 2024

Ballmer Exit Brings Microsoft a Chance for Reinvention

But with no clear successor to Mr. Ballmer lined up and a jumble of businesses that will require the skills of a polymath to run, the company still faces huge obstacles to reclaiming its former glory.

While Microsoft in Mr. Ballmer’s reign as chief executive has yielded the spotlight to more glamorous companies like Apple, Google and Facebook, it still makes some of the biggest money-gushers in the technology business, including its Windows operating system for personal computers and Office applications like Word. Its profit last quarter was nearly $5 billion, compared with $3.2 billion for Google and $6.9 billion for Apple. Anyone who uses a PC to create a résumé or a term paper or to do online banking is more often than not doing so on a machine running Windows.

But the PC business, which Microsoft has ruled for decades, is under siege by mobile devices like tablets, an area that Microsoft has stumbled in, and that Mr. Ballmer famously underestimated. Analysts say the company needs to act quickly to right itself.

“The walls are falling now,” said George Colony, chief executive of Forrester Research, a research and advisory firm. “They may fall very quickly. There’s not much time for the board.”

Nonetheless, it has given itself a year to choose a successor, and Mr. Ballmer, 57, will stay on until then. The company declined requests for an interview with him.

Some analysts have suggested that Microsoft could use a seasoned turnaround artist in the mold of Lou Gerstner, who rescued I.B.M. from irrelevance in the 1990s. Current and former Microsoft executives said the company would more likely turn to someone with a technology pedigree. Some pundits have called for Bill Gates, Microsoft’s co-founder and chairman, to return to the company, in a nod to how Steven P. Jobs revitalized Apple.

But people who know him said Mr. Gates has no intention of doing that because of his full-time focus on philanthropy.

Others believe Microsoft is not governable in its current form. Ben Slivka, a 14-year employee of Microsoft who left in 1999, said the company should split up into five independent companies he calls “Baby Bills” devoted to Windows client software, Office applications, servers, Xbox and the Web.

“Give each of them (say) $5B for a rainy day, but not much more,” Mr. Slivka wrote in a post on Facebook after the news of Mr. Ballmer’s retirement. “You want them to be hungry. Return most of the cash hoard to shareholders.”

That Mr. Ballmer announced his plans without a successor in place is puzzling and led to speculation among current and former Microsoft executives that Mr. Gates might have been losing patience with his longtime friend, whom he first met when they were students at Harvard University in the 1970s. A spokesman for Mr. Gates said he was not available for interviews.

While the board, Mr. Ballmer and Microsoft gave no public indication that he was pushed out, the disappointing stock price may have been a factor in his departure. Over Mr. Ballmer’s 13-year tenure at Microsoft, the stock has lost 36 percent of its value, if the dividends that Microsoft pays out are excluded. Apple, meanwhile, was up nearly 2,000 percent over the same period. With the announcement of Mr. Ballmer’s departure on Friday, Microsoft’s stock rose more than 7 percent, closing at $34.75.

“Microsoft will have to go through a very hard and painful transition,” said Joachim Kempin, a former senior Microsoft executive, who has written a book critical of the company under Mr. Ballmer. “I’m not very confident the next guy will be able to immediately turn the ship around.”

This year, ValueAct, a hedge fund known for behind-the-scenes shareholder activism, began acquiring a small stake in Microsoft. Some analysts say they believe other shareholders might have been willing to join with the fund in efforts to lobby for management changes at the company. Two years ago, the investor David Einhorn said Mr. Ballmer was “stuck in the past” and called for him to go.

Mr. Ballmer provided plenty of fodder for such critics over the years with his dismissals of technologies that turned out to be game-changers. At a forum in Seattle in 2007, shortly after Mr. Jobs introduced the iPhone, Mr. Ballmer said there was “no chance that the iPhone is going to get any significant market share.”

Article source: http://www.nytimes.com/2013/08/24/technology/ballmer-announces-retirement-from-microsoft.html?partner=rss&emc=rss

Novelties: Pilot Plant in the Works for Carbon Dioxide Cleansing

Now a Canadian company has developed a cleansing technology that may one day capture and remove some of this heat-trapping gas directly from the sky. And it is even possible that the gas could then be sold for industrial use.

Carbon Engineering, formed in 2009 with $3.5 million from Bill Gates and others, created prototypes for parts of its cleanup system in 2011 and 2012 at its plant in Calgary, Alberta. The company, which recently closed a $3 million second round of financing, plans to build a complete pilot plant by the end of 2014 for capturing carbon dioxide from the atmosphere, said David Keith, its president and a Harvard professor who has long been interested in climate issues.

The carbon-capturing tools that Carbon Engineering and other companies are designing have made great strides in the last two years, said Timothy A. Fox, head of energy and environment at the Institution of Mechanical Engineers in London.

“The technology has moved from a position where people talked about the potential and possibilities to a point where people like David Keith are testing prototype components and producing quite detailed designs and engineering plans,” Dr. Fox said. “Carbon Engineering is the leading contender in this field at this moment for putting an industrial-scale machine together and getting it working.”

Should the cost of capturing carbon dioxide fall low enough, the gas would have many customers, he predicted. Chief among them, he said, would be the oil industry, which buys the gas to inject into oil fields to force out extra oil. The injection has minimal risk, said Howard J. Herzog, a senior research engineer at the Massachusetts Institute of Technology. “The enhanced oil recovery industry has put tens of millions of tons of carbon dioxide into the ground every year for decades with no problems,” he said.

Much of the carbon dioxide for enhanced oil recovery comes from naturally occurring underground reserves that are piped to oil fields, said Sasha Mackler, vice president of Summit Carbon Capture, a unit of Summit Power Group in Seattle. Summit Carbon Capture harvests carbon dioxide gas from coal and natural gas-burning plants before it can be spewed into the air.

The global demand for carbon dioxide will only grow as oil becomes scarcer and demands for transportation fuel rise, Mr. Mackler said. Direct capture from the atmosphere would offer another source for the gas.

Yet the cost of capturing carbon dioxide directly from the air has yet to be demonstrated, said Alain Goeppert, a senior research scientist at the Loker Hydrocarbon Research Institute at the University of Southern California. Dr. Goeppert recently reviewed the literature of air capture technology.

“There is a lot of speculation of how much it will actually cost,” he said, with estimates from $20 a ton to as much as $2,000. “We won’t know for sure until someone builds a pilot plant.” (An average passenger vehicle generates about five tons of carbon dioxide a year.)

Dr. Keith says he thinks it may be possible to lower the cost of capture toward $100 a ton as the company grows.

Carbon Engineering’s machines use a carbon-dioxide-absorbing solution of caustic soda to remove the gas from the air. “The issue at the pilot plant,” Dr. Keith said, “will be to test the equipment at the scale the vendors tell us they need” to provide performance guarantees for a full commercial plant. The process is intended to collect at least 100,000 tons a year of the gas.

The concentration of carbon dioxide scrubbed from the flue gases of coal- and gas-fired power plants is about 5 percent to 15 percent higher than that in the air, where it is about 393 parts per million. “You have to handle much larger volumes of gases” to capture the same amount of carbon dioxide from the air that you would from power plant flue gases, Dr. Goeppert said. “But Dr. Keith is going to be able to capture it with the absorbent he uses.”

The recovered carbon dioxide may be sold one day, not only for enhanced oil recovery, but also to feed algae to produce biofuel. It may also be sequestered in places like unmineable coal seams and oil and gas reservoirs, says a new Energy Department report.

Gas capture would be extremely important in developing a rational price for carbon emissions, said Dr. Fox of the British mechanical engineering society. “Whatever it costs to take it out of the air and store it away,” Dr. Fox said, “that’s the price polluters would pay if they want to put carbon into the air.”

Another advantage of direct air capture is geographic flexibility. “It doesn’t matter where you take the carbon dioxide out,” he said, since the gas is mixed evenly in the earth’s atmosphere. “You could have air capture machines in the Australian desert to account for New York City car emissions.”

Most important, air capture could be used to get rid of that last fraction of carbon dioxide that escapes into the air, for example, even from power plants outfitted to collect most of their emissions, said Klaus S. Lackner, a Columbia professor and a board member and adviser to Kilimanjaro Energy, another company working on collecting atmospheric carbon dioxide.

“I see direct air capture as the long-term way of dealing with all those emissions that can’t be dealt with in any other way,” he said.

E-mail: novelties@nytimes.com.

Article source: http://www.nytimes.com/2013/01/06/business/pilot-plant-in-the-works-for-carbon-dioxide-cleansing.html?partner=rss&emc=rss

The Mets Do Not Have to Look Far to Find Bidders

He almost certainly works in finance, and he probably roots for the Mets.

Who is he? He is one of the men angling to buy a minority share of the Mets.

The general profile of the known bidders for the Mets is not surprising, but it lacks the diversity of team owners who built ships (George Steinbrenner), sold cars (Bud Selig), co-founded Home Depot (Arthur Blank), erected shopping malls (Herb Simon) or started Microsoft (Paul Allen) with Bill Gates.

It makes sense that rich native Long Islanders would want a piece of the Mets despite their recent dismal on-field record and hefty financial losses. About one-quarter of the Mets’ fan base comes from the New York suburbs of Nassau and Suffolk Counties. A locally bred fan in the prime of his career — with lots of money — might be more willing than an outsider to accept a stake in the team that gives him no control. And in an economy in which Wall Street is faring better than most industries, a New York team can attract cash from financial executives.

“New York is where you’d think the money would come from,” said Rob Tilliss, the founder of Inner Circle Sports, a sports investment bank and adviser. “There are enough local buyers around the New York metropolitan area with substantial money.”

The sale for a limited partnership is nearing its final stage as the owners look at three offers for up to 49 percent of the Mets. Fred Wilpon, the Mets’ principal owner, was 43 when he bought a small piece of the team in 1980. He is from Brooklyn, whence people fled farther east; lives on the wealthy North Shore of Nassau County; put the headquarters of his company, Sterling Equities, in Great Neck; and made his money in real estate. His former partner in the Mets, Nelson Doubleday, was also a wealthy Long Islander, who published books.

More than 30 years later, Steven A. Cohen fits the parameters of the modern, updated profile. Cohen, a billionaire hedge fund manager in Connecticut, is 54. He runs SAC Capital Advisors, a powerful $12 billion hedge fund in Stamford, where the former Mets manager Bobby Valentine is the public safety director, and lives in Greenwich, Conn., where Tom Seaver lived before turning to winemaking. Cohen, who is from Great Neck, has a suite at Citi Field.

Anthony Scaramucci, also a hedge fund manager, is the profile personified. He is 47. He grew up in Port Washington. He lives in Manhasset. He delivered Newsday as a youngster. He took the Long Island Rail Road to Shea Stadium to watch the Mets. And Valentine gave him a blurb for his book, “Goodbye Gordon Gekko.”

Scaramucci still appears to be in the running to pay up to $200 million for less than half of the Mets, along with a neighbor in Manhasset, James F. McCann, whose son, Matt, works for Scaramucci.

McCann is 59, from Rockaway, Queens (a borough that is still a geographic part of Long Island), and while not a Wall Street Master of the Universe, runs a business, 1-800-Flowers.com, from Carle Place on Long Island.

McCann has a direct connection to the Mets through his sponsorship of the team.

Steven Starker, another Wall Streeter, is from Brooklyn (also geographically part of Long Island) and was a founder of BTIG, a global trading firm. Two of his bidding partners also have Long Island roots. Kenny Dichter, a co-founder of Marquis Jets, and Doug Ellin, who created the HBO series “Entourage,” are 1986 graduates of Kennedy High School in Merrick, which last year inducted them into its hall of fame. The status of their offer for the Mets has not been determined. But it is typical of a process like the one being run by the investment firm Allen Company to ask finalists to improve their bids.

David Heller and Marc Spilker epitomized the investor profile, too, but they are out of the bidding. They are fabulously rich Mets fans, in their 40s, from Long Island. Spilker graduated from W. C. Mepham High School in Bellmore. Heller is a global co-leader of Goldman Sachs’s securities division. Spilker was a Goldman executive but is now president of Apollo Global Management, a private equity firm.

One of the first men in his 40s to voice an interest in the Mets was Mike Repole, the owner of the Kentucky Derby hopeful Uncle Mo. He is 42, grew up in Middle Village, Queens, lives on Long Island and made his wealth when Coca-Cola paid $4.1 billion for the company he co-founded, Glacéau, the maker of Vitaminwater. He balked at bidding without getting any control over the team.

Still another bidder, about whom little has been heard, is Jason Reese. He is in the financial world, as chairman of an investment bank called Imperial Capital in faraway Los Angeles. Still, he is a native Long Islander who played goal on the West Babylon High School lacrosse team and later for Yale.

One pair of bidders who have dropped out barely fit the profile. Leo Hindery, a media investor, and Marc A. Utay, managing partner of a private equity firm, work in Manhattan. But Hindery is from Washington State and Utay from Glenview, Ill.

The current profile of the Mets’ bidders resembles, to some degree, that of Joan Whitney Payson — an heiress whose main home was in Manhasset, and who, in her late 50s, became the first owner of the Mets, and their most ardent fan.

Peter Lattman and David Waldstein contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=818090feb93a2841afa6b4421d741835