SOFTWARE COMPANY Microsoft has new plan to stay in competition
CEO warns that size could hurt efforts to stay in touch with customers.
SEATTLE (AP) -- Microsoft Corp. needs to avoid "big company ills" if it wants to beat competitors and boost its long-stagnant stock price, chief executive Steve Ballmer told employees in an annual memo Tuesday.
In the memo, which traditionally lays out the company's goals for its fiscal year that began Thursday, Ballmer wrote that avoiding the pitfalls of corporate size involves more than just building new, innovative products. The software titan also must make sure it isn't losing touch with -- or the faith of -- its current customers.
"Nothing solves 'big company' ills quite like a strong focus on accountability for results with customers and shareholders," Ballmer wrote.
What to avoid
In a Tuesday interview with The Associated Press, Ballmer said the world's largest software company cannot be run like the startup it once was. But he added, "We have to avoid becoming a certain kind of big, process-bound bureaucracy."
Such flexibility is especially important as Microsoft goes up against companies like Apple Computer Inc., whose iPod music player has become a hit while Microsoft has lagged in online music distribution.
Matt Rosoff, an analyst with independent researchers Directions on Microsoft, said Ballmer is right to be worried that his company's size could hurt its ability to compete, noting that similar issues hurt Microsoft competitors such as IBM Corp. back when Microsoft was the young gun.
"The risk has always been that Microsoft, having vanquished IBM, is going to turn into IBM," Rosoff said.