Microsoft's midlife crisis

Steven Ballmer, Microsoft's cheerleader and chief executive, takes the stage at the Georgia Dome in Atlanta to stoke the spirits of 10,000 faithful at the company's annual sales meeting. "Win, drive, innovate, impress!" he shouts, his forehead glistening under hot stage lights as ponds of sweat soak the pale blue shirt on his barrel-chested frame. "But there's a way people keep score. Billions! Billions! Billions! If you wanna grow, things that rhyme with 'billions' are very good," he roars, sprinting up and down the aisles to trade high fives with starstruck salespeople. The crowd at the Georgia Dome loves it, but even Ballmer's booming voice can't mask the disturbing truth: Microsoft is slowing down. It is bigger, more lumbering and less profitable than it was five years ago. Its sales are up 73% in five years, but profits are up only 30%. Payroll has doubled in the last six years. In the fiscal year just ended, sales rose only 8%, the first time the company has ever reported less than double-digit growth.

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