RIM came up short in its most recent quarter. Nokia lost money on a 20% decline in sales and six-point drop in smartphone market share. Meanwhile our earnings are up 47% on record sales of Macs and iPhones. And friends, we are only getting started. Peace out. I’m going to go outside and do donuts in the parking lot.

Lasseter sent this to me, with a note asking if we want to sue. I said sure, why not. It’s been a while since we sued anyone.

Much love to dear reader John (a different one) for the tip.

Went like this:

Q. What platform does Oracle run best on?

A. An overhead slide projector.

Same for Droid, apparently. I mean, it runs great on ABC and CBS and NBC. Not sure how it will run on, like, an actual wireless cell phone network.

Oh, it also seems to run well on blogs, like Boy Genius Report. And it makes a pretty sexy slide show too. But again — on a cellular network? I’m from Missouri. You’ll have to show me.

Can’t tell you what, obviously. But there’s something brewing. Gruber doesn’t know about it, but the people we care about are being briefed in advance. Stay close to your Mac or iPhone, and have your credit card ready.

As I wrote Saturday night, it’s clear the Times wanted to do a hatchet job on Fester and that they just didn’t have the balls to come right out and say that he should be fired, even though that’s what they think, and that’s why they published their article. But why not just say what they think?

Really it’s the paradigm of the “objective newspaper” that forces them into this weird straitjacket where they can’t ever say what they really mean. They have to pretend to be “objective,” but what that really means is you put a vague headline on the story and you write the top in some boring way but then you just stack up a pile of negative quotes from people who don’t like the Borg — bam, bam, bam — but you spread them out, and you put some boring stuff in between them, like so many pillows between so many grenades, and you arrange the whole thing in an artful way such that you can still say the story is “balanced” even though anyone who knows how to read your newspaper — anyone who knows how to crack the code, so to speak — will understand full well what you’re really saying, which is that Ballmer is a failure and should be booted out.

Reading business coverage in the Times, or in any mainstream publication, is a lot like reading Pravda during the Soviet era — you have to know the code. That bad review of a Shostakovich symphony? It ain’t about the music. Of course, the music wasn’t about the music, either. So all of these conversations are taking place all around you, all this information is zipping past you, and everything is encrypted.

Why doesn’t the Times just say what they want to say? Why resort to doofy photos and strings of negative quotes cushioned between pillows of pointless prose? Well, see, that wouldn’t be “objective” — and by “objective” I mean keeping it boring enough that you won’t scare off advertisers who, if they had their way, would place images of their cars and clothes and jewelry next to complete pablum that would never offend anyone or create any kind of controversy. Ever wonder why there aren’t many ads in the parts of the paper where they cover politics? Um, yeah.

So we get this kabuki theater and they call it journalism. And then newspapers wonder why they’re losing their audience. To put this another way: Try to imagine what this story would have sounded like if Ashlee Vance, the guy who wrote it, had published it on his personal blog, where he could say exactly what he wanted to to say and didn’t have to worry about scaring off advertisers meeting the high standards of “objectivity” espoused by the New York Times. And which would you rather read? Yeah, me too.

So I had brunch with Larry yesterday and he showed up carrying the Sunday Times and we were talking about the huge and incredibly embarrassing photo (above) of Ballmer that they ran on the front of their business cover. It wasn’t quite as bad as the one of Ballmer with his tongue sticking out, but come on — you know from the photo that this isn’t a friendly story. So then we started wondering how the Borg has become such a joke — and Larry had an interesting theory.

The online version also shows that photo, but for the real impact you have to get the print edition. Just imagine — it’s Sunday morning, you just woke up, you’re having your coffee and flipping through the sections, there’s some nice travel piece about bicycling in Vermont and then — bam! Jesus fucking Christ! Suddenly there’s this huge photo of Ballmer looking like a doofus and you think, wait a minute, this guy runs a company? A really big important company? Like, one that does billions of dollars in sales each year? You’ve got to be kidding.

I mean, come on. This shit doesn’t happen by accident. If they sent out a photographer, he had to have shot a few hundred frames. If they just bought stock art, well, they had thousands to choose from. You think they just happened to choose the one where he looks like the dude from Sling Blade? He looks like he’s daydreaming, and not about business — he looks like he’s daydreaming about pie. Or donuts. Or maybe some of them french-fried potaters.

As I wrote Saturday night, it’s clear the Times wanted to do a hatchet job on Fester and that they just didn’t have the balls to come right out and do it. (For more on that, see my next post.) Then Larry was saying how ten years ago the Times wouldn’t have dared write an article like this, and we both started wondering out loud how the Borg had become such a total fucking joke.

How did all these billions of dollars slip through Ballmer’s fingers? How did Microsoft find itself a leader in nothing and playing catch-up on every front — in MP3 players, on the cloud, in search. How did Amazon roll out S3 and not Microsoft? How did Google control the search market? How did Apple take over online music retailing and MP3 hardware? How did Microsoft let that market for smartphones get away from them? How is it that everything about Microsoft’s business is backward looking? This is the real problem they have now. They’re fighting wars that are already over. They’re investing huge energy into defending things they already control, like Windows. As they do this, as they put so much effort into lost causes like search (Bing v. Google) they keep missing out on new things. So their problems just keep getting bigger and bigger, like a snowball rolling down a hill.

Larry’s like, Look, the Borg has never been out ahead on anything. The difference is, they used to be able to catch up. They’ve always been copiers. That’s been their business model from the start. Let others go out and create a market, then copy what they’ve done, sell it for less, and crush them. They got into the OS business by stealing DOS from someone else. They created Windows by stealing Apple’s ideas. They got into desktop apps by copying Lotus and WordPerfect and then having the bright idea to bundle all the stuff into one cheapo suite. They pulled the trick off again with Internet Explorer versus Netscape, in the late 90s — that was the last time they were able to let someone get out ahead of them and then pivot and copy and give it away free and take them over. By the end of the 90s they had broken through 50% market share in browsers, and that was it for Netscape.

But what happened after that? This is what we were wondering. Larry says two things happened. One, the Borg got slower. They got big and fat and bureaucratic. Two, everyone else got faster. Look at Google. They got so big so quickly that there was no way for the Borg to claw them back. Same for all these other Web businesses. Amazon, Ebay, Skype, Facebook, Twitter. They came out of nowhere, and what they were doing was free, so the Borg couldn’t just do a crappy knockoff and sell it for less. They were up against free — the Web companies were using their own strategy against them.

Another difference was the customer set. In the old days you were talking about selling to corporate America, and consumers just followed suit — remember the marketing shit about how you want the same stuff at home that you have at the office? Selling to corporates was easy. You have lots of levers you can pull to make them do what you want and pay what you tell them to. We all had a playbook — we just studied what IBM had been doing for decades, and we copied them. (Larry stopped and chuckled a little bit when he said this, and for a moment just stared out the window with this glazed, happy expression on his face.) The Borg’s other customer set were hardware OEMs. Again, easy to coerce, and no messy dealing with end users. Perfect.

But on the Web things changed — now you were selling to consumers, and the Borg had no way to coerce or control consumers the way they could coerce corporate accounts.

So what happens next? Larry says he’d like to think the Borg might just go away, but they’re way too big and have way too much cash for that. So, they stick around. But the Times is right — they’re now pretty much irrelevant, just like IBM, which is ironic and perhaps fitting since IBM was always the Borg’s ultimate role model. Microsoft has followed the same narrative arc — it’s like a business version of Groundhog Day. Do not be surprised if they find a way to get into services, and build a business around milking their installed base. They’ll call it a cloud business, but really it will mean either building data centers and renting out cycles, or just running customer data centers for them.

The other thing we were wondering is, How the fuck did Microsoft let this story happen to them? How did they not see this coming?

Larry said no way would any reporter from the Times get close to him and then be allowed to do a story like that — they know if they pull that shit they wind up in the trunk of a car someplace. Same for me. The only one at the Times who ever gets within 50 feet of me is Pogue, and that’s only because, as he says, he’s not a reporter, he’s a stenographer a fanboy an entertainer. And even then we throw a shitload of flacks at him up front and find out what questions he’s going to ask, what his story is going to look like, who else he’s talking to, when it will run, who’s his editor, what kind of “fact-checking” will we be allowed to, and so on. And we throw in plenty of hints to make it clear what will happen to him if he steps out of line. Hey, it’s called “media relations.” Have you heard of it?

(Doppelganger art work by FSJ Art Director Jason.)

Ashlee Vance gets access to Ballmer and delivers a death blow. The Borg, Vance says, is on a “long and winding course toward irrelevance.” Seriously, this is a devastating piece. Money quotes (lots of them) after the jump. I’m still reeling.

Gist of the article is, the Borg isn’t scary or mean or evil anymore. They’re just a joke: bumbling, slow, washed up and irrelevant. They’re the M.C. Hammer of computing. Remember when you couldn’t start a software company because Microsoft would crush it or buy it? Now think of all the stuff that has sprung up and passed them by, all the opportunities they’ve missed: Google search. Google apps. Gmail. YouTube. Amazon. Ebay. Skype. Facebook. Twitter. iPods. iTunes. iPhone. The cloud. Think of the billions in revenue, the hundreds of billions in market capitalization, that have slipped through Ballmer’s fingers.

Why the Borg’s copycat business model no longer works

Listen to what people say about Ballmer in the article and then ask yourself whether this guy will still be CEO in two years. That’s the subtext here. That’s what is taking place between the lines. Nobody dares come right out and say it on the record, but I’m sure Ashlee Vance heard it off the record because every CEO or heavy-hitter in the Valley has been saying this for a while now: Ballmer needs to leave. Honestly, most of us can’t believe he’s still running the place.

Why the Times won’t just come out and say what they mean about Fester

Ballmer is coming up on his 10th anniversary as CEO, and his legacy looks like this:

Mine over the same period looks like this:

And here’s one that compares the performance of Apple, Google and Microsoft from the start of January 2000, when Ballmer took over as CEO. We’re up 700%. Google is up 400% from their IPO in 2004. Microsoft is in negative territory.

So here’s what people had to say:

Legendary Valley flack Regis McKenna:

Microsoft sort of disappeared from the scene.

Marc Benioff:

They are trapped in their own psychosis that the world has to revolve around Windows on the PC. Until they stop doing that, they will drag their company into the gutter.

Ex-Borgtard Bruce R. Chizen:

They are not the company they once were in terms of market position. They no longer have a monopoly that is critical to the future of computing.

Brand guru James R. Gregory:

This used to be the company that everyone looked to for innovation and excitement. It has lost that edginess in a fairly convincing way.

Cloud computing pundit Nick Carr:

I think Microsoft is still moving pretty slowly as it shifts at least part of its business to the cloud. Some of that is due to its corporate culture, but I think most of it is due to it trying to protect very lucrative businesses with high profit margins.

Benioff again:

They won’t fade away as long as there are PCs. But they are not delivering the future of our industry, either.

The scariest one, if you’re Ballmer, is the following quote from an investor whose fund recently bought 800,000 shares of Borg stock:

I am willing to give the present management another 15 months.

Um, right. Because in 15 months things are going to look soooo much better. Windows Mobile will be crushing the iPhone. Bing will be crushing Google. Azure, the Borg’s cloud stuff, will be a huge smash hit. Yup. That’s the plan. All they need is just a few more months. Right.

Goodbye, Fester. It’s been nice knowing you. Not really. But you know what I mean.

UPDATE: To read more on this, check out:

Why the Borg’s copycat business model no longer works

and

Why the Times won’t just come out and say what they mean about Fester

If your Mac (or PC, let’s face it, there are a few out there) blows up..who ya gonna call?  Florence Henderson, also known as everyone’s favorite TV mom, hopes you’ll call her company if you’re in need of answers, and closing in on the AARP demo.

Loquacious Microsoft CEO Steven A. Ballmer says his shop’s search partnership with Yahoo! faces some legal snags, mainly due to pesky jurisdictional hurdles.  He adds, “Europe is a little confusing.”  Well, it’s all those tiny countries.