Microsoft cofounder’s investment group calls for Xbox spinoff

By: Eddie Makuck


The next Microsoft CEO would be smart to consider spinning off the company’s consumer business, which includes search advertising and the Xbox brand, according to cofounder Paul Allen’s investment group Vulcan Capital.

Allen is “intrigued and interested” by the recent Microsoft management and structural changes, Vulcan Capital chief investment officer Paul Ghaffari said during the Financial Times Investment Management Summit in New York last night as reported by Financial Times.

Ghaffari said the “overwhelming majority” of Microsoft’s revenue is generated by selling software and services to business customers. It is here that Microsoft should focus, he argued.

“The search business and even Xbox, which has been a very successful product, are detracting from that. We would want them to focus on their best competencies,” Ghaffari said. “My view is there are some parts of that operation they should probably spin out, get rid of, to focus on the enterprise and focus on the cloud.”

Current Microsoft CEO Steve Ballmer announced in August that he would retire within the next 12 months. Ford CEO Alan Mulally is reportedly the front-runner for the job, though no official announcements have been made.

A Microsoft representative was not immediately available to comment.

Major Sony investor Daniel S. Loeb proposed in May that the company spin off its entertainment business, which includes PlayStation, by selling as much as 20 percent of its assets in an initial public offering. Sony unanimously voted in August to reject this proposal.

The Xbox One launches on November 22 for $500.

Source: GameSpot

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