British gamblers don't just bet on cricket and soccer. Bookmakers across the pond like to offer betting action on all kinds of events, like the winner of celebrity Big Brother, or who will be the next mayor of London.
Starting this week, the Brits are betting on who's the next CEO of Microsoft (NASDAQ:MSFT), thanks to Middlesex-based bookie Ladbrokes.
The wisdom of crowds can yield serious insights -- that's what our own CAPS community is based on, for example. So let's see what the wise crowds say about the third CEO in Microsoft's 38-year history.
Since the bookmaker's odds are based on actual bets, with a hefty profit margin added on top (a 65% vig in this case), the handicap statements offer a direct look into the popular opinion on every event. Microsoft won't pick a leader based on a public vote, or even a shareholder referendum, so the odds aren't exactly a dead giveaway in this case.
Moreover, frontrunner Stephen Elop only gets 5/1 odds, or a 20% chance of winning the race. In other words, there is no odds-on favorite here. Several of the top picks stand a real chance of winning the CEO job, and there's plenty of room for dark horse surprises.
No. 1 Stephen Elop: 20% odds
Elop is a semi-internal candidate for Microsoft. He left Redmond to become CEO of Finnish mobile phone giant Nokia (NYSE:NOK) in 2010, but the job always felt like a temporary position. Elop's presence at Nokia ushered in the switch to Microsoft's Windows Phone platform, and rumors about a Microsoft buyout popped up in short order.
Maybe this is the time to bring the prodigal son back home from Finland -- perhaps along with that long-rumored Nokia acquisition. But Elop hasn't exactly been a smashing success at Nokia, so I'm kind of a skeptic. Let's move on.
No. 2 Kevin Turner: 17% odds
Turner is a true insider. The former Sam's Club CEO became Microsoft's chief operating officer in 2005, and is a member of Microsoft's strategic inner circle. Picking Kevin Turner would be the closest thing to declaring "business as usual," and this might be Steve Ballmer's favorite option to replace him.
Then again, Turner's extensive retail experience might turn the company in a new direction with a much heavier retail-store component. Don't laugh, but if Kevin Turner takes the corner office, I would expect him to make a serious buyout offer to Best Buy very quickly. The struggling big-box store chain is looking for an exit strategy, and the Turner-flavored Microsoft would want an instantly massive retail footprint. He doesn't quite have that clout as COO, but that middle "E" would make a big difference.
No. 3 Steven Sinofsky: 13% odds
Here's another expatriate Microsoft insider. Sinofsky was a Redmond lifer who managed Office products for many years and then spearheaded the life-saving Windows 7 development in the wake of the Vista disaster. When he left the company last fall, insiders said that he quit because Ballmer wouldn't anoint him as his heir apparent. A triumphant return to the CEO chair he always coveted would be packed with sweet irony.
Sinofsky's name is behind much of what's right with Microsoft today. There's no question that he can do the job, and I'm sure that Microsoft would be a healthier business with this Steve at the helm.
But he just took a new job with venture capital firm Andreessen Horowitz -- I mean, the day before Ballmer made his big announcement -- and is teaching classes at Harvard's prestigious business school, to boot. The timing might be too awkward. The cynic in me wonders whether that's why Ballmer made his move right after seeing Sinofsky committing to something else.
All things considered, this would be my pick for Microsoft's top job. Sinofsky is exactly the kind of winning, detail-oriented technologist that Microsoft needs right now. The only question is, what will it take to make him come back to the company that pushed him out?
The long shots: Reed Hastings and Vic Gundotra
Netflix (NASDAQ:NFLX) CEO Reed Hastings currently gets a 16-to-1 chance of winning Microsoft's CEO chair, or roughly a 6% shot. Hastings would certainly be an interesting choice, and not a completely shocking one, either.
Hastings spent a few years on Microsoft's board of directors, so he already knows the company better than most true outsiders. Shares of his current company have tripled year-to-date and grown nine-fold in five years. Hastings knows something about serious growth, which is a commodity in short supply at Microsoft. If Hastings comes in via a quick buyout, like the rumored Nokia solution, then Microsoft would suddenly have a serious media operation on its hands. And Hastings would be able to tap into Microsoft's vast cash reserves to send Netflix on a global growth spree of epic proportions.
But he's a long shot for a reason. Hastings may know a lot about the movie business and he does have an engineering background, but he's not a proven success in the hardware and software sectors where Microsoft makes its daily bread.
At Netflix, he likes to make game-changing designs freely available to anyone, including competitors. The culture clash with Microsoft's tight-fisted intellectual property policies would be legendary.
Plus, Hastings already has what he needs to cover the globe in Netflix services. It'll just take a few years longer without a suddenly limitless budget, which may actually be good for the quality of the final product as Netflix learns from the expansion experience.
So it's an interesting idea, but ultimately not a serious one. Reed Hastings is happier running Netflix separately, and Microsoft needs a different kind of manager.
Vic Gundotra is an even darker horse in Ladbrokes' ratings -- a 25-to-1 shocker with a 4% chance of victory. But he'd make more sense than Hastings, and arguably more than Elop, as well.
Gundotra ran Microsoft's developer outreach operations for 15 years, but left in 2007 to take a similar job at Google (NASDAQ:GOOGL) when the non-compete clauses in his Microsoft contract expired. At Big G, he marshaled the engineering details for a while but is now also responsible for social media projects such as Google+ and Android app development.
If that's not a skill set that Microsoft could use, I'll eat my Foolish hat. Gundotra would instantly make Microsoft a credible force in mobile computing and social media, some of the most magical keywords in this day and age. And it doesn't hurt that he's been in Redmond before, networking with potential allies and gaining firsthand knowledge of what's working and what's broken inside Microsoft. He'd bring another culture clash with more Google-like values, but it'd be tempered by that old insider's view.
So if Vic Gundotra is such an obvious choice, why doesn't he sit right at the top of the Ladbrokes charts? Well, maybe he'd rather focus on a well-defined set of responsibilities at Google than reboot into a much wider and more desperate situation at Microsoft. Some people are turnaround experts and revel in that challenge. Gundotra is the opposite, having managed nothing but winning platforms.
Recall than Gundotra left Redmond a few months after the release of Vista. When he took the reins of Android's developer programs, the platform was an underdog to Apple's early iPhone dominance but the market was still brand new. He has never come back from the ropes or a knockdown counted to nine, which is what Microsoft's mobile and social efforts are facing today. If I were Vic Gundotra, I'd be pretty happy in Mountain View. I don't see him jumping back to Redmond.
So there you have the top three choices going by the bookmaker's odds, and two dark horses that might be interesting but are dark for a reason. Got any other candidates in mind? Ladbrokes gives Apple CEO Tim Cook a greater chance of becoming Microsoft CEO than of Clint Eastwood becoming the next POTUS, for example. Feel free to share your thoughts in the comments box below. But hurry up -- Ladbrokes closes the betting window in October.
The Motley Fool recommends Apple, Google, and Netflix. The Motley Fool owns shares of Apple, Google, Microsoft, and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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