Is Ballmer's Retirement a Prelude to a Microsoft Split-Up?

Microsoft CEO Steve Ballmer announced today that he will retire in 12 months. Some analysts say he was pushed out. I'd have to agree since Ballmer loves being the CEO of Microsoft. But is there more to it?

As many expected, the stock began to climb following the news and it may continue to do so for the next year until a replacement is named and everything is reevaluated. But who can replace Ballmer? He has Microsoft blood pumping through his veins and has been a fixture at the company since the early days. He knows everything.

Personally, I don't see how at this point anyone new can run the company, which has removed or retired all those who were being groomed to head it up. By this I mean Jeff Raikes, who Gates took with him to the Gates Foundation. And with a company so massive, an outsider would be chewed up and spit out by the vested interests and mini-empires.

So what's the point of the 12-month ramp anyway? To do a long-term search? That never works.

It's obvious to me the company is preparing to divide itself into little pieces. The real reason the stock is going up could be that the company is worth more in pieces than it is worth as one behemoth.

Anyone can see how easily you could split off the gaming folks, business division, retail stores, and hardware division. Each entity would have agreements in place for long-term supply of software and services.

The 12-month ramp is presumably to figure out how to do the split and release some of the new companies as IPOs while privatizing other parts of the company. So instead of finding someone new to run the company, you split up the company and bring in experts to handle the legal side and find suitable CEOs for the various divisions.

This sort of shake up would ferret out all the empire builders and allow for new and more creative structures to emerge. And since everyone will have to be in a semi-startup mode, the dead wood will be eliminated by actual hard work.

Ballmer may put himself on a couple of the boards of the more interesting spinoffs. Or maybe all of them.

Meanwhile, because the new stock will be more aggressively priced for the new companies, all the shareholders, including Ballmer, will be wealthier than ever.