Ballmer Will Say Adios, IPOs Will Return, Amazon Will Crack $200: Predictions for 2011 From WTIA Panel
Microsoft, desperate to become a real player in mobile, will do something bold like acquire Finnish wireless giant Nokia. CEO Steve Ballmer will ride off into the sunset. Amazon’s stock could soar to over $200 a share.
As the great Yogi Berra once said, it’s tough to make predictions, especially about the future. Yet, with a little prodding from moderator John Cook of TechFlash, a few of Seattle’s well known entrepreneurs and investors made some of those bold declarations last night at a gathering in Seattle pulled together by the Washington Technology Industry Association.
This year’s group of prognosticators included Greg Gottesman of Madrona Venture Group; Mike Buhrman, the co-founder and CEO of Finsphere; Chris DeVore of Founder’s Co-op; Sunny Gupta, the CEO of Apptio; and Mark Ashida of OVP Venture Partners.
The conversation got off to a fast start when Cook asked about what Ballmer can do to revive Microsoft in 2011. The answers were all over the place, and reflected some very interesting strategic insights. Here are the highlights:
—Ashida suggested that Ballmer take the company private. “The company and its employees would be transformed, and energized.”
—Gottesman had a more bearish take, saying the software giant has surrendered the premium slot in the mobile market and the mantle of low-cost provider to Google, meaning it is now “stuck in the middle” where great businesses go to die.
—Gupta heaped some praise on Microsoft’s Azure cloud computing platform as a “real competitor” to Amazon Web Services.
—DeVore said he was puzzled by why Microsoft always seems to be trying to move into consumer markets when its real strength is in the enterprise. “Microsoft is the nerdy kid in the corner who’s good at math, and he’s always trying to be the cool kid,” DeVore said. His advice: Microsoft should stick with what it is good at, and buy a “very boring” business that is a good strategic fit, like Redmond, WA-based Concur Technologies (NASDAQ: CNQR).
Nobody immediately chimed in when Cook posed the touchier question of whether Ballmer will still be at the helm at the end of 2011. Gottesman pointed out that Microsoft has shown amazing growth in revenue and profits in the decade that Ballmer has been in charge, yet the stock remains stagnant, as investors have lost their excitement for the company. (I don’t cover Microsoft, so I was shocked to learn it only commands a price/earnings ratio of 11 today, compared to cooler companies like Apple with a P/E of 20, and Google at 24).
“He must hate Wall Street,” Gottesman said.
Buhrman was the brave soul who went on a limb to predict that Ballmer will exit the stage before the end of 2011. He noted that Ballmer’s revenue and profit performance has been exceptional, but cautioned that it will be hard to keep it going. Buhrman also saw something happening between the lines when he heard news about Ballmer selling $2 billion of his Microsoft stock holdings. “He’s at his peak, and he’s liquidated some of his stake. That’s a precursor,” Buhrman said.
For startups in the house, Gottesman had an encouraging (albeit tempered) prediction. The IPO window is always fickle, and can get slammed shut when “something happens in Ireland,” he said, but he expects this opportunity to open up for more than one Seattle tech company in 2011. He wouldn’t say a specific number, other than “we will have more than one, but not more than five.” He also said he expects one of the TechStars companies will be acquired in 2011 for a “nice exit.”
“That will be good for the community,” Gottesman said.
As for naming names on IPO candidates, that’s when the panelists got a little more shy. Gupta said he thinks Impinj and Redfin are doing well, although I didn’t hear him actually predict an IPO in their future.
By the end, the panel was going on record with their views on how some of technology’s biggest names will perform in the coming year, by predicting their stock prices at the end of 2011. Most of the panelists expected Microsoft to essentially keep treading water, ending the year between $25 and $28 a share, although Buhrman predicts it will hit $35 because it will buy Nokia.
Here’s what the panelists had to say about where they think Amazon’s stock will end up at the end of 2011: The stock closed at $158.35 yesterday.
Gupta: The stock will rise 20 to 30 percent (which translates to $189 to $205)