Following Tuesday's disappointing Yahoo! ( YHOO) earnings, we'll see many press articles Wednesday congratulating Microsoft ( MSFT) CEO Steve Ballmer for walking away from the $31-a-share deal to acquire Yahoo! a few months back. Jerry Yang and his board will be pilloried again for their arrogant decision to dismiss the buyout offer.

Yet, shareholders might soon plant a bull's-eye on Ballmer's back.

Microsoft's stock sits around $24, as it did in 1998. Like the S&P 500's returns over the past 10 years, you could also refer to that period as Microsoft's lost decade.

Microsoft has more revenue, more businesses and more employees today than in 1998. But with this, it has become more bureaucratic. It's paid out dividends and bought back stock with its considerable cash hoard. And shareholders see its grip on the PC loosening as the world moves to Web services, and Microsoft is a distant competitor to Google ( GOOG) in that sphere.

Although some Microsoft shareholders I spoke to this summer were pleased that the company abandoned its foray to purchase Yahoo! at a significant premium, Ballmer's reputation among his shareholders was damaged from that episode.

More than ever, Microsoft shareholders are wondering where Ballmer is leading the company. Will Microsoft be a large cash-cow conglomerate that pays a nice dividend and grows much more slowly?

Will it make a splashy and expensive acquisition of Yahoo!, Research In Motion ( RIMM), or SAP ( SAP) to try to keep up a faster rate of growth? Or will it be stuck in the middle of those two very different strategies, trying to do both?

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