Microsoft’s Lost Decade-How the company lost its Mojo

In the modern days of Apps, Facebook and virtual farms of Zynga, we seldom hear about the once so powerful Microsoft. Here is an excerpt from a must read piece by Vanity Fair.

As for announcements of quantum leaps into the technological future: nothing. Ballmer applauded the still-long-awaited Windows 8 operating system (which as of this writing is available only as a release preview online). He burbled about his expectations for Xbox, the game console that successfully competed with Sony PlayStation. Out came Windows Phone 7 again, which, despite widespread praise from users, had experienced bleak sales results. A demo followed, which proved an embarrassment; the device’s voice-to-text messaging failed and then another glitch forced a Microsoft staffer to reach for a different phone. The media response was dismal—the company’s last presentation, a prominent blogger wrote, was a “cruel joke.”

Microsoft’s low-octane swan song was nothing if not symbolic of more than a decade littered with errors, missed opportunities, and the devolution of one of the industry’s innovators into a “me too” purveyor of other companies’ consumer products. Over those years, inconsequential pip-squeaks and onetime zombies—Google, Facebook, Apple—roared ahead, transforming the social-media-tech experience, while a lumbering Microsoft relied mostly on pumping out Old Faithfuls such as Windows, Office, and servers for its financial performance.

Amid a dynamic and ever changing marketplace, Microsoft—which declined to comment for this article—became a high-tech equivalent of a Detroit car-maker, bringing flashier models of the same old thing off of the assembly line even as its competitors upended the world. Most of its innovations have been financial debacles or of little consequence to the bottom line. And the performance showed on Wall Street; despite booming sales and profits from its flagship products, in the last decade Microsoft’s stock barely budged from around $30, while Apple’s stock is worth more than 20 times what it was 10 years ago. In December 2000, Microsoft had a market capitalization of $510 billion, making it the world’s most valuable company. As of June it is No. 3, with a market cap of $249 billion. In December 2000, Apple had a market cap of $4.8 billion and didn’t even make the list. As of this June it is No. 1 in the world, with a market cap of $541 billion.

How did this jaw-dropping role reversal happen? How could a company that stands among the most cash-rich in the world, the onetime icon of cool that broke IBM’s iron grip on the computer industry, have stumbled so badly in a race it was winning?

Full article here.