Microsoft CEO candidate Stephen Elop reportedly considering dropping Bing and selling Xbox business

By on November 8, 2013, 12:30 PM
microsoft, android, xbox, ios, office, bing, ceo, microsoft ceo, ford, stephen elop, gaming console, alan mulally

As we all know, Microsoft is on the hunt for a new CEO to replace Steve Ballmer before his retirement comes into effect within the next 10 months. Several names have been floating around as a replacement, two of which being Ford CEO Alan Mulally and former Nokia head, Stephen Elop. While not many details have surfaced regarding Mulally, other than that he has no intention of leaving Ford, recent reports are showing that Elop already has some major plans to shake up the company if he does indeed take on the role.

Likely a part of the interview process at Microsoft, Elop is beginning to outline an overall strategy for the company with a strong interest in pushing Office on mobile platforms in a much deeper way. He is also looking at cutting some of the fat at Microsoft, including search and Xbox, two businesses he feels are distracting for the company.

Although Office is already available on Android and iOS, Elop's potential plan would see a much more complete version of the apps on mobile in order to maximize sales of the software, as opposed to using it to push Windows hardware sales.

Elop would reportedly considering ditching Microsoft's Bing search engine as well as selling off its Xbox business, something investors have suggested over the years. In fact, Microsoft co-founder Paul Allen is in agreement with the Elop strategy, Allen's asset manager, Paul Ghaffari, said that "there are some parts of that operation they should probably spin out, get rid of, to focus on the enterprise and focus on the cloud." Investment analysts say that Microsoft's financial earnings could be bolstered as much as 40% by 2015 with this strategy.

However, it seems highly unlikely that Microsoft would take this road, especially with regards to Bing and Xbox. The new console is just around the corner now, and we are seeing the company integrate Bing more and more throughout its product lines. Bing is implemented directly in Windows 8.1 and powers a number of features available with the Xbox One and its apps.

Microsoft is said to be choosing a Ballmer successor as early as the end of the year, so it won't be long before we see if any of this comes to fruition.




User Comments: 47

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TomSEA TomSEA, TechSpot Chancellor, said:

That's interesting. Just a few years ago several industry analysts predicted that MS would break off many of their assets to become 3rd party subsidiaries in order to maintain focus on their primary products.

yRaz yRaz said:

A few things I could understand, but Xbox? I don't own a console, but I understand that Xbox is a huge money maker.

4 people like this | treeski treeski said:

Xbox is one of the few things that makes Microsoft look cool. That would be a huge mistake.

1 person liked this | Vrmithrax Vrmithrax, TechSpot Paladin, said:

Does this surprise anyone? A guy who has been up to his eyeballs in mobile manufacturing and marketing forever, suggesting the company moves harder into mobile and trims the "non-mobile" fat... It's almost a cliche.

cliffordcooley cliffordcooley, TechSpot Paladin, said:

Does this surprise anyone? A guy who has been up to his eyeballs in mobile manufacturing and marketing forever, suggesting the company moves harder into mobile and trims the "non-mobile" fat... It's almost a cliche.

I don't know the guy but if what you say is true, that does make sense.

1 person liked this | Vrmithrax Vrmithrax, TechSpot Paladin, said:

A few things I could understand, but Xbox? I don't own a console, but I understand that Xbox is a huge money maker.

I think part of the problem is that it doesn't necessarily fit well with the current Microsoft agenda. There is a push for "convergence" in everything MS is doing, with the stated goal of being a devices and services company. While the Xbox seems like it would fit into the devices side of that equation, the Xbox itself would not lend well towards the convergence of software/OS thrust. At some point, the ideal is for everything to be cross-platform compatible and have identical interfacing. (Windows 8 and the adoption of the Windows Phone tile interface concept is a prime example). When you start trying to apply that kind of integration into the Xbox, it becomes less and less a console and more just another version of a PC platform, so it risks completely losing an identity. Even though it's really just a specialized and standardized PC hardware package at heart, Microsoft goes to great pains to distance themselves from that consumer perception. It's a big paradox, and it may be that splitting or selling off the Xbox portion of the company would be easier than trying to figure out how to fold it into the grand scheme. Plus, selling it off while that portion of the business is doing well would mean a massive potential payday.

Guest said:

I'm no expert, but this sounds like disaster. They all do the same thing-CUT this, cut that, instead of cutting half the VPs. Improve the business licensing, make sure (even if it means WIN 7.1) you have a firm hold on business desktop, laptop and servers. The commercial world is fickle, but commercial PCs aren't going away. Although I like the Surface, I don't think I would push this to the detriment of the OEMS. Keep it a high end device, and let your OEMS push volume.

I would probably use WIN Phone on ARM tablets instead of RT.

MilwaukeeMike said:

Xbox is one of the few things that makes Microsoft look cool. That would be a huge mistake.

Amen to that. Those surface commercials with dancing, well-dressed, trendy 20 year olds aren't cutting it.

1 person liked this | Armand Winter Armand Winter said:

I'm looking for Elop to become CEO and dismantle Microsoft from the inside... after all he did such a good job with Nokia

Guest said:

This doesn't really sound good to me. Xbox is one of the only places where Microsoft has really succeeded with consumers, throwing it away would be counterproductive towards their goal of becoming a devices and services company, in my opinion.

Skidmarksdeluxe Skidmarksdeluxe said:

A few things I could understand, but Xbox? I don't own a console, but I understand that Xbox is a huge money maker.

I think part of the problem is that it doesn't necessarily fit well with the current Microsoft agenda. There is a push for "convergence" in everything MS is doing, with the stated goal of being a devices and services company. While the Xbox seems like it would fit into the devices side of that equation, the Xbox itself would not lend well towards the convergence of software/OS thrust. At some point, the ideal is for everything to be cross-platform compatible and have identical interfacing. (Windows 8 and the adoption of the Windows Phone tile interface concept is a prime example). When you start trying to apply that kind of integration into the Xbox, it becomes less and less a console and more just another version of a PC platform, so it risks completely losing an identity. Even though it's really just a specialized and standardized PC hardware package at heart, Microsoft goes to great pains to distance themselves from that consumer perception. It's a big paradox, and it may be that splitting or selling off the Xbox portion of the company would be easier than trying to figure out how to fold it into the grand scheme. Plus, selling it off while that portion of the business is doing well would mean a massive potential payday.

I fully agree with you there. I wouldn't be at all surprised if Elop takes the reigns.

Guest said:

The new Xbox is already turning itself into more of an entertainment rig and less of a game machine. All these "great new features" that have been added, in the mind of this gamer, are nice and all but I don't need them. I would rather have a great game console that has outstanding graphics/video rendering and sound then whether or not I can get Netflix on it. I have a BR Player that has Netflix. There are TVs out that have Netflix. The Xbox is less gaming console than it's predecessors and more HTC box.

Guest said:

"Does this surprise anyone? A guy who has been up to his eyeballs in mobile manufacturing and marketing forever, suggesting the company moves harder into mobile and trims the "non-mobile" fat... It's almost a cliche."

Elop would reportedly considering ditching Microsoft's Bing search engine as well as selling off its Xbox business, something investors have suggested over the years. In fact, Microsoft co-founder Paul Allen is in agreement with the Elop strategy, Allen's asset manager, Paul Ghaffari, said that "there are some parts of that operation they should probably spin out, get rid of, to focus on the enterprise and focus on the cloud." Investment analysts say that Microsoft's financial earnings could be bolstered as much as 40% by 2015 with this strategy.

^You must of stopped reading before you got to this paragraph.

Guest said:

This is why he would not make a good CEO for Microsoft. He has no idea what the industry is about. The future in not desktop, the day has come and gone. The future is XBOX. That is the most unique and sustainable product in the lineup.

Vrmithrax Vrmithrax, TechSpot Paladin, said:

"Does this surprise anyone? A guy who has been up to his eyeballs in mobile manufacturing and marketing forever, suggesting the company moves harder into mobile and trims the "non-mobile" fat... It's almost a cliche."

Elop would reportedly considering ditching Microsoft's Bing search engine as well as selling off its Xbox business, something investors have suggested over the years. In fact, Microsoft co-founder Paul Allen is in agreement with the Elop strategy, Allen's asset manager, Paul Ghaffari, said that "there are some parts of that operation they should probably spin out, get rid of, to focus on the enterprise and focus on the cloud." Investment analysts say that Microsoft's financial earnings could be bolstered as much as 40% by 2015 with this strategy.

^You must of stopped reading before you got to this paragraph.

Likely a part of the interview process at Microsoft, Elop is beginning to outline an overall strategy for the company with a strong interest in pushing Office on mobile platforms in a much deeper way. He is also looking at cutting some of the fat at Microsoft, including search and Xbox, two businesses he feels are distracting for the company.

And you must have skimmed the article and missed this part?

Point is, it's not surprising that he'd be fine with ditching the Xbox in favor of more mobile push, since it's what he is familiar with. Cloud integration is more and more mobile-centric, so again, it fits well within Elop's familiar bias.

1 person liked this | cliffordcooley cliffordcooley, TechSpot Paladin, said:

Maybe they will sell XBOX to Valve.

And you must have skimmed the article and missed this part?

Point is, it's not surprising that he'd be fine with ditching the Xbox in favor of more mobile push, since it's what he is familiar with. Cloud integration is more and more mobile-centric, so again, it fits well within Elop's familiar bias.

Not to mention that mobile strategy is what Balmer has been striving towards since the introduction of Windows 8. After all Windows Phone wasn't working, so they made a push in the desktop market. Now they have the opportunity to introduce a CEO that thinks mobile more than Balmer or Gates ever did.

JC713 JC713 said:

Finally! Bing sucks. As for the xbox division, isnt that where a chunk of MS's profits are coming from at the moment?

Guest said:

Like AMD selling ATI and focus on the cpus.

1 person liked this | cliffordcooley cliffordcooley, TechSpot Paladin, said:

Finally! Bing sucks.
It took a long time, but I finally disagree with one of your comments. I see absolutely nothing wrong with Bing and never have. When I type a search, I always (always as in when I don't Google is no help either) get the result I'm looking for on the first page.

andyo said:

Like AMD selling ATI and focus on the cpus.

AMD brought ATI to build APU's. A large part of the mobile marker now.

Butch said:

Its funny that when I read the articles about this type of stuff about Microsoft it's all about Xbox and Bing. Why? I don't know. For those of you not in the real corporate world, remember that Microsoft's REAL bread and butter is Office, Operating Systems, Server OS's and databases (SQL). Oh, and not to mention that small little piece of business called Exchange Server. There are many more MS business apps I could list here but you get the idea. These are the areas the make the most money for MS. The Xbox stuff is tiny in comparison.

Now, with that being said, I love the MS mobile hardware/OS. I have a Nokia 920, Surface Pro and an XBox and would not want to go back to iCrap or Android and would love to see MS continue to support and enhance these products. However, if I was being considered as CEO of MS I would really think about getting back to what made MS great.....software and operating systems. NOT hardware and games..

I know many of you would disagree but when you really think about it and take out the emotional aspects, it really does make sense. I have a lot of money invested on MS/Nokia hardware but I am one of the few that agree with Elop's ideas.

Tedster Tedster, Techspot old timer....., said:

What a *****- the xbox platform is Microsofts cash cow. Everything else is slowly going downhill.

Butch said:

What a *****- the xbox platform is Microsofts cash cow. Everything else is slowly going downhill.

Downhill? To where? To who? As databases go you have MS-SQL and ORACLE. SQL in by far the dominate player. Email? Exchange is in 99% of all mid to large companies IN THE WORLD. Not to mention Windows and Office... Are you kidding me? Xbox revenue in tiny compared to this..

hahahanoobs hahahanoobs said:

And you must have skimmed the article and missed this part?

Point is, it's not surprising that he'd be fine with ditching the Xbox in favor of more mobile push, since it's what he is familiar with. Cloud integration is more and more mobile-centric, so again, it fits well within Elop's familiar bias.

Again, you're forgetting his ideas are backed by Paul Allen and investment analysts. aka this idea didn't just come out of the blue. And you also have forgotten that M$ is already on the mobile train with Surface, ultrabooks, and Windows Phone as well as the Metro UI. When you look at the whole picture, his ideas make perfect sense. Bing is good, but its not Yahoo or Google good, and with everything M$ has on their plate right now, the chance that Elop can help turn that around is comforting to consumers AND investors. If you spread yourself out too much it can and will most likely backfire.

2 people like this | JC713 JC713 said:

It took a long time, but I finally disagree with one of your comments. I see absolutely nothing wrong with Bing and never have. When I type a search, I always (always as in when I don't Google is no help either) get the result I'm looking for on the first page.

I dont mind it, but Google is just better. I notice that I get more accurate results via Google vs Bing. May have just been the certain search. I should use it more to more accurately compare it.

lawfer, TechSpot Paladin, said:

A few things I could understand, but Xbox? I don't own a console, but I understand that Xbox is a huge money maker.

It actually isn't. The Xbox Division burns around 2 billion dollars a year. Hell, they spent 100 million on the Xbox One's controller R&D alone.

1 person liked this | jester376 said:

This is why he would not make a good CEO for Microsoft. He has no idea what the industry is about. The future in not desktop, the day has come and gone. The future is XBOX. That is the most unique and sustainable product in the lineup.

Well sorry for all you people who wake up every morning with a boner for your xbox. However, Microsoft never started as an xbox company and sure and the hell never survived as a company because of its xbox business. Did it ever occur to people that the reason Microsoft's os and services market has been on edge is because they have been spending valuable resources on things like bing and xbox? Like the other person who said this on here already, Microsoft is spreading its resources too thin. And yes bing is no google, but google started out as a search engine company and has had plenty of time to perfect it over the years. I'd say Microsoft has done pretty well for themselves considering that they havent had much time to work with bing. Minus infinite number of points for guest.

Railman said:

If XBox is seen to be irrelevant to MS then surely Windows RT is several orders less relevant? Maybe MS like flogging dead horses.

By the way several persons have pointed out how big the corporate sector is to MS so why are they going out of their way to piss off enterprise with W8? I was talking with one of our IT experts who described W8 as horrendous.

Guest said:

Getting rid of the bing services would be a big mistake. bing search, weather , news, etc services are some of the best services out there. but this is what Microsoft does, they come out with something, make it great, get you hooked on it and then cancel it, it's very frustrating. this new ceo that wants to get rid of the bing services, they can toss his ..s in the trash!!

mailpup mailpup said:

this new ceo that wants to get rid of the bing services...
Please re-read the article. Elop is only a CEO candidate. That means he doesn't have the job yet.

captaincranky captaincranky, TechSpot Addict, said:

A while back, one of the big PC makers, (not sure if Dell, or HP), hired a CEO that decided they were no longer going to build PCs. That particular jack*** was gone in a matter of months.

Arguably, Steve Ballmer is all for this person as a replacement, since it might actually succeed at making him, (for once), look good.

And you must have skimmed the article and missed this part?

Point is, it's not surprising that he'd be fine with ditching the Xbox in favor of more mobile push, since it's what he is familiar with. Cloud integration is more and more mobile-centric, so again, it fits well within Elop's familiar bias.

Again, you're forgetting his ideas are backed by Paul Allen and

OK, Surface lost about a half billion dollars on its first run. M$ has s*** for luck so far in everything they've tried in mobile, (Think "Zune" , and now they're going to make it a mobile operation? Not to mention the still piss poor adoption rate of Windows 8, despite the fact they're ramming it down people's throat's.(*)

I'm still "reeling", (pun intended), from the big "douches dancing on desks", Surface fiasco.

Good luck with that..

In any event, here we have another big shot, running his mouth about what M$ "should be", when all he knows is basically, what it seems he failed at before!

(*) Christmas is coming, and people will be giving and getting tons and tons of hardware, a huge percentage of which will have Win 8, pre-installed, and with no other choice in sight.

I'm sure M$ will distort this result, and claim all those X-Mas toys were sold BECAUSE of Windows 8, and not in SPITE of Windows 8.

With industrial intrigue & espionage being what is, I'm guessing any titan of a company such as M$,has to watch out for a "Trojan Horse", even to the extent it might be a new CEO.

mailpup mailpup said:

A while back, one of the big PC makers, (not sure if Dell, or HP), hired a CEO that decided they were no longer going to build PCs. That particular jack*** was gone in a matter of months.
It was HP.

learninmypc learninmypc said:

I'll be so happy if bing gets dumped. Google is far superior in my opinion.(y)

captaincranky captaincranky, TechSpot Addict, said:

I'll be so happy if bing gets dumped. Google is far superior in my opinion.(y)
Then simply use Google and ignore Bing. Why should it have to be cancelled to make you happy?

learninmypc learninmypc said:

Thank you captaincranky

dennis777 dennis777 said:

I understand that bing is sometimes useless and needs to remove.. but xbox is another thing.

cliffordcooley cliffordcooley, TechSpot Paladin, said:

So everyone one here only wants Google? How the hell can you guys scream competition is good and then shout Bing needs to die? Google is the one I don't want any dealings with but that is what you guys want, I'm not gonna complain about its existence.

captaincranky captaincranky, TechSpot Addict, said:

Thank you captaincranky
I think you missed an important point. Google is using, "Chrome" to validate their search engine, while M$ is using "Bing" to validate their browser.

Of course, "Chrome" doubles as spyware, but that's another argument.

Forg0t2 said:

A few things I could understand, but Xbox? I don't own a console, but I understand that Xbox is a huge money maker.

ehm no, actually the Xbox isn't a huge money maker for the company but a pain in the ass.

Arris Arris said:

Does this surprise anyone? A guy who has been up to his eyeballs in mobile manufacturing and marketing forever, suggesting the company moves harder into mobile and trims the "non-mobile" fat... It's almost a cliche.

He was at MS before Nokia, and didn't seem to be "up to his eyeballs in mobile manufacturing". And after having had a look at his previous career to MS (including Adobe and Boston Chicken[which went bankrupt]) it doesn't suggest this was the case either.

captaincranky captaincranky, TechSpot Addict, said:

He was at MS before Nokia, and didn't seem to be "up to his eyeballs in mobile manufacturing". And after having had a look at his previous career to MS (including Adobe and Boston Chicken[which went bankrupt]) it doesn't suggest this was the case either.
So then, this might be an attempt at bankrupting a second company? If Ballmer couldn't bankrupt M$, I doubt anyone can....:oops:

Forg0t2 said:

This is why he would not make a good CEO for Microsoft. He has no idea what the industry is about. The future in not desktop, the day has come and gone. The future is XBOX. That is the most unique and sustainable product in the lineup.

I disagree. The future is definitely not Xbox. The future is still Computers only miniaturized. Today phones are computers but really compact and the smaller the technology the faster it becomes because you can stack up and up (Still think that is not the way to go but okay). Making everything smart small and cool looking is what currently seems to be the future. The Xbox and playstation and Wii(U) are currently THE entertainment systems but are infact regular computers designed into a small box. Valves steam machine prototype is currently proving that the Xbox one is just a computer in a box. So I really think that selling xbox is in fact a logical step for Microsoft because it is not in line with Microsofts goal. Microsoft always had a big problem and that was being part of everything. I think they should focus on a few things but I dont agree with Elop completely. Maybe I can't see the things he does but his ideas purely don't seem to work in my eyes...

Arris Arris said:

So then, this might be an attempt at bankrupting a second company? If Ballmer couldn't bankrupt M$, I doubt anyone can....:oops:

I think he would be coming home to MS, perhaps it was a deliberate play taking on the role at Nokia to put them in a position to be bought by MS and CEO of MS being his reward.

1 person liked this | hopgop1 hopgop1 said:

In the Bing vs Google argument, remember that competition can help improve something, if for example Google hadn't had any competition from Bing would they have an "almost" flawless search engine? Also if Bing was dumped would Google still strive to improve and stay the best?

captaincranky captaincranky, TechSpot Addict, said:

I think he would be coming home to MS, perhaps it was a deliberate play taking on the role at Nokia to put them in a position to be bought by MS and CEO of MS being his reward.
...[ ]....With industrial intrigue & espionage being what is, I'm guessing any titan of a company such as M$,has to watch out for a "Trojan Horse", even to the extent it might be a new CEO.
So what you're saying is, I had it right the first time, just in the wrong order?

tipstir tipstir, TS Ambassador, said:

I say that I blame this guy to drop bing, since I don't use it. It's map system not bad they should merge some of bing map features with google map features. Bing is really not needed. Xbox everyone has that, I don't but everyone I know has it. Microsoft wanted programmers back in the early 2000 era to be called upon to develop a new line of games for new device this was the Xbox. I had turned that down. Pay was good for only 1 year of contract work. Must live in Washington State. This CEO better think again. I bet he uses Google daily.

Guest said:

" It's a big paradox, and it may be that splitting or selling off the Xbox portion of the company would be easier than trying to figure out how to fold it into the grand scheme. Plus, selling it off while that portion of the business is doing well would mean a massive potential payday."

Unless of course the xbox continues to make them money in which case they could just decide to keep it along side their "grand UI" future plans anyways. It could just be one of the few things that simply doesnt get integrated with the rest of most of their products. As long as it makes money it could mean they will simply distance it from their plans rather than make it part of it... Gaming over here. Bsuniess/consumer products (windows, office, ect) over there.

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