It's up to Ballmer to articulate first to his board and then to shareholders (and potential shareholders) what his plans are. Eight years into his tenure, he hasn't done this.

A classic stereotype about CEOs is that those who come from a sales, engineering, or finance background tend to be more short-term focused and analytical. Those from marketing or a variety of functional background experiences tend to be more strategic and long-range thinkers. It's not either/or, of course, as the best CEOs have a combination of short-term decision-making and street smarts, balanced with a long-range vision.

Ballmer is often described (even in his official corporate bio) as ebullient, hard-charging, passionate and dynamic. These are all fine characteristics, but clearly he's not spent enough time with shareholders selling the overall plan for Microsoft.

If you're a value institutional investor and buy into Microsoft now because of its low price-to-earnings ratio and dividend yield, you face the possibility that Ballmer might change the rules of the game next week with another "transformational" acquisition. This "undefined strategy risk" is a weight on the stock price.

Ballmer can easily correct this problem, and Microsoft has such wealth, talent and market leadership that it cannot be counted out. Despite Ballmer's enormous personal wealth, it's likely he views the next 10 years of his career as the most important. This is his time to step out of Bill Gates' shadow and truly leave his mark on Microsoft.

I believe the "growth model" of Microsoft is a more compelling vision than the "utility model." To execute that vision, he will probably need to shed some businesses to increase its focus.

We'll see whether Ballmer can make this elephant dance.

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At the time of publication, Jackson's fund owned no Microsoft or Yahoo! Jackson still personally holds a small long position in Yahoo! in his personal account.

Eric Jackson is founder and president of Ironfire Capital, LLC, and the general partner and investment manager of Ironfire Capital US Fund LP and Ironfire Capital International Fund, Ltd.

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