01/01/2012 04:37 EST | Updated 03/02/2012 05:12 EST

RIM's Co-CEOs Jim Balsillie And Mike Lazaridis Named 2011's Business Newsmakers For BlackBerry Woes

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MONTREAL - A long, slow slide into notoriety made 2011 a sorely trying year for Jim Balsillie and Mike Lazaridis, the two men at the top of BlackBerry maker Research in Motion.

Their company — once the most valuable in Canada — has fallen very, very far in less than a year. Though RIM is by no means at death's door, it has fallen far behind its peers in the lightning-paced smartphone market, suffered through the worst service outage in its history and lost tens of billions of dollars in market value.

Now, there's talk their company could be a takeover target and even their own investors are calling for their heads.

The smartphone maker's descent from tech darling to stock market pariah has earned Balsillie and Lazaridis the title of The Canadian Press business newsmakers of 2011, as chosen in an annual survey of editors and broadcasters by The Canadian Press.

"This pair blissfully missed or ignored all of the warning signs of change, turning this Canadian tech success story into a Canadian tragedy," said Winnipeg Free Press business editor Steve Pona.

"They rode the wave that carried RIM to the top of the market, onto the shoals. They should have been brought to heel by the RIM board long ago."

It's the second time Balsillie's name has topped the annual survey of business editors and news directors — the last was in 2009, under very different circumstances. Back then, Balsillie was singled out for his tenacity in pursuing ownership of a professional hockey team and his steady hand on RIM's tiller as it rode out the recession.

RIM's fortunes in 2001 were also chosen by a wide margin as The Canadian Press Business Story of the Year by a wide margin, with 37 per cent of the vote well ahead of runner up the Canadian economy.

At the beginning of 2011, RIM was in fine shape and gearing up to launch the PlayBook, its answer to Apple's hugely successful iPad. But its spring rollout left critics largely unimpressed. From then on, the news for RIM was mostly bad.

It was forced to cut 2,000 jobs to keep costs in line. A worldwide, four-day BlackBerry outage in October cost it more than $50 million in revenues and tarnished its reputation. It warned investors it would book a $485-million charge on the cost of discounting the price of PlayBooks by more than half to help boost sales.

In December, RIM reported third-quarter net profits of US$265 million, well below the $911 million for the same period a year before. That came despite the sale of millions more BlackBerrys than in 2010 and a 35 per cent rise in global subscribers to 75 million.

Lazaridis urged investor "patience and confidence." Balsillie noted the company is "not satisfied with the performance of the business in the United States." Both had their salaries reduced to $1.

Perhaps the nastiest bit of news for RIM was that the delayed launch of a new generation of BlackBerrys — which some have seen as a ray of light for the company — from early to mid-2012 due to availability of the chipset that will power the new BlackBerry 10.

The Waterloo, Ont., company saw its stock market value fall from about $50 billion at the beginning of the year to about $7.6 billion by year's end. Shares hit a low of $12.80 this year, falling from a high of almost $140 in 2008.

The company was the subject of numerous takeover rumours, with potential buyers including Samsung and telecom giant. Sources even said RIM had already rebuffed offers from online retail giant Amazon as well as Microsoft and Nokia.

Balsillie and Lazaridis captured 46 per cent of votes cast by editors and news directors in the business newsmaker survey, edging out Bank of Canada Governor Mark Carney, who picked up 41 per cent of the vote.

Activist RIM shareholder Vic Alboini, who wants Balsillie and Lazaridis replaced and the company sold as is or in parts, said they haven't been able to move the company ahead to meet market demands. The pair also serve as RIM's co-chairmen of the board.

"I think the two co-CEO's have to be commended for the past," said Alboini, president and chief executive of merchant bank Jaguar Financial Corp. in Toronto.

But "they are dealing in the past. What RIM desperately needs is a new leader and as I have mentioned all along, a strong independent chairman to guide this company forward," Alboini said.

Alboini and his supporters make up almost 10 per cent of RIM's shareholders and he has said that is expected to grow to about 20 per cent as they continue to push for major change at RIM (TSX:RIM).

Despite RIM's woes, the company still has strong international sales, a customer base of 75 million and is profitable.

BlackBerrys are known as secure devices, so secure that repressive governments in the Middle East and governments worried about domestic terrorism such as India have asked RIM for access to encrypted messages sent on them by their citizens.

But their market share has fallen to about 10 per cent in the lucrative U.S. and tech savvy consumers often regard BlackBerrys more as a pure communications device than an Internet-friendly gateway to news and entertainment content.

The Canadian Press also conducted a parallel survey in conjunction with Yahoo! Canada to allow the public to make its own choices for Business Newsmaker of the Year. Although respondents chose Bank of Canada governor Mark Carney as newsmaker of the year, they chose RIM as the business story of the year with 30 per cent of the vote.

"Its signature product, the BlackBerry, has redefined the way we live and work; its chief executives have fascinated us; and its story has inspired a generation of engineers and entrepreneurs," said Noel Hulsman, managing editor of Yahoo's finance and autos section.

"U.S. President Barack Obama telling his security detail that he couldn't live without his BlackBerry told us everything we needed to know. And then it all went wrong," Hulsman said.

"The PlayBook, RIM's answer to its archrival's iPad, proved a colossal bust, critically and commercially, calling into question everything from the company's technological prowess to its marketing chops."

Telecom analyst Anil Doradla said Balsillie and Lazaridis have never been considered "friendly" to the company's investors and have lost sight of what consumers want, noting its new generation of BlackBerry smartphones won't be out until late next year.

"Let's not kid ourselves, the fall of RIM should be squarely blamed on two individuals — Jim Balsillie and Mike Lazaridis," said Doradla of Chicago-based William Blair & Co.

"The dramatic change in the mobile landscape caught them off guard and RIM is paying the price right now," he said, with Apple and Android smartphones eating away at RIM's market share over the past couple of years, appealing to consumers with touchscreen devices and lots of software applications.

"So I think 2012 is going to be a rough year."