Something sad emerges in the embarrassingly abrupt demise of the Kin, the new social-networking smartphone from Microsoft that died at the end of June. It is sad to see two years of development effort, and tens of millions of dollars in new TV ads, get obliterated in less than two months on the market.
But more than that, it’s sad to see the most powerful software company in the world reduced to pursing life as an Apple Wannabe. Sad to witness an aging giant—in its Fat Elvis stage, still great but way outta shape—trudging cumbersomely after a fickle, youth-is-wasted-on-the-young market.
What to do? Smash ’em up! Microsoft should look at spinning off its consumer businesses—an $11 billion-a-year, red-ink-stained amalgam—and refocusing on its real core: internal software and the apps that run on it.
Tonight on CNBC’s “Fast Money,” we launch a four-part series prosecuting the case for breaking up tech and media titans that simply have gotten too big for their own good. In too many cases, these conglomerate-contraptions get in their own way. The promised synergy almost never gels, and the debt pile swells up without getting repaid.
A gaggle of Gullivers could benefit from a smashup. Sony should split software from hardware. Verizon and AT&T should secretly yearn to shed wirelines in favor of all-wireless. News Corp. should look at cleaving off print publications to focus on TV shows and movies. Heck, even Disney—the one media & entertainment titan that truly has made synergy work—should look at unlocking the underappreciated value of ESPN by spinning off a 15 percent chunk to shareholders.
We offered a preview of the “Smash ’em Up!” series on “Fast Money” a week ago, when I made the case for breaking up Microsoft. You can see that segment here.