By Julie Bort
When asked if he thought the Salesforce deal was the “one that got away,” Ballmer held up his hands and said, “Look, I am a guy who actually believes in revenue and profit. I really do. And you can dilute something and get nothing back. I’ll just tell you, I could never make the math work on Salesforce. Never, ever, ever, ever. Ever. Never.”
What he means by “dilute” something is mostly a metaphor to indicate that not every big acquisition yields a big return. The conversation began by Ballmer admitting that buying ad company aQuantive back in 2007, paying an 85% premium “was the worst acquisition mistake. It was $7 billion dollars, it was what I call just a blow into a gale force wind. It was dumb.” Microsoft took a whopping $6.2 billion write-down on it in 2012.
But then again, he might also be referring to diluting the stock. Salesforce has been repeatedly criticized over the years by investors for its incentive pay, particularly its habit of gorging execs and employees on stock options.
As for profits, Salesforce has been reporting profitable quarters in the past year, but was notoriously operating in the red for many years, including in 2015, when Microsoft was in talks to buy Salesforce for a hefty $55 billion price tag.
The relationship between Microsoft and Salesforce was notoriously acrimonious while Ballmer ran Microsoft, too. They are direct competitors in a number of markets. The relationship improved for a brief time after current CEO Satya Nadella tried to buy Salesforce, but after that fell through, it has since soured again.
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Source:: Business By Insider