The end of Microsoft as we know it?

This one's easy.

It's much better to develop software if you're a small company (only in terms of people, not capital). You're faster. Less bureaucracy.

But to sell software, it's easier if you're a big one. So Microsoft organises itself in several independent units to develop and one big entity to sell. Problem solved.

The Bungie incident is about creativity. Games are harder to develop than normal software, and require more creativity. Bungie programmers are tired of only making Halo. If Microsoft didn't let Bungie detach from the big company, then all Bungie employees would have quit and started another company. I'm tired of Halo too. Half-life is so much better that it hurts just to think about it.

Not all Microsoft employees can afford to quit and start a company.

I like the idea of Microsoft organizing more like Berkshire Hathaway... Warren's whole idea was that he only buys brilliantly run companies, and why would he change anything after he bought it? It's already brilliantly run. Microsoft could probably benefit from the idea of trusting the unit to be responsible for itself.

However, they will not spin off Windows or Office. I saw some stat once that these two products make up over 90% of their profits. They will milk those cash cows until they die, which will eventually happen, but not anytime soon.

What throws me is why he mentioned stock price and splits. Everyone that knows anything about stocks knows that splits are just masturbation. If anything they are a waste of money and obfuscate historical data because you have to keep track of split adjustments. A higher per share price != higher market capitalization.

Look for a reverse stock split to give Microsoft a $5000 share price. Now it's worth more than Google. Boom - a whole new company - problem solved.

Does this guy read his own stuff before publishing it?

here is the original interview: http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/... just in case you missed it.