Microsoft takes a step back after its failed purchase of Yahoo

Steven A. Ballmer, Microsoft’s chief executive, walked away from a Yahoo deal on May 3 still looking for an answer to his company’s fundamental problem, reports the New York Times: Its time-tested recipe for success isn’t working against Google, the leader in the current wave of internet computing. With a bid for Yahoo, Microsoft was trying to buy its way out of the problem. It was a controversial step and a gamble, but at least it was a big move. Now, there is no clear prospect of a quick fix for Microsoft, as the center of gravity in computing continues to move away from the personal computer, Microsoft’s stronghold, and to online applications. Microsoft remains a powerful company, and highly profitable, but its stock price has stagnated amid doubts about future growth. Years of antitrust scrutiny have tempered its competitive behavior in new markets. Ballmer, 52, must lead the internet-era shift in strategy and corporate culture without the man who, to many, is still the public face of Microsoft. Bill Gates, the company’s cofounder, chairman and largest shareholder, is stepping away from day-to-day work at Microsoft in July to focus on philanthropy…

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