Visiting Microsoft chief Steve Ballmer is a big guy with a footballer's presence and boisterous knack for resolving that
complicated nerdy eye-glazing stuff around computers and the web to
And as a former football coach, Ballmer also has a skill for turning
the many criticisms about how slow-moving the world's largest software
maker is against the hip, quick competition from the likes of Apple
and Google into his own best form of defence - attack.
"If someone is going to change the model of the way we do things, its
going to be us, he told a CEDA lunch in Sydney on Friday. "Get
excited, let's get after them. I think the opportunity for us to
continue to lead is incredibly strong."
But even News Corp boss Rupert Murdoch says Microsoft has lost its
dominance to the universal Google, which has become the gateway to the
"If what Rupert is really saying is: 'Let's have somebody else, say
Google, have all the antitrust problems', I say hey! I'm with Google.
Let's go," he says.
Sitting down with the Weekend AFR, Ballmer counters that it is
consistent effort over time that will work for the company.
More than three decades since Ballmer's nerdy Harvard sophomore buddy
Bill Gates founded the company - which has turned Gates, Ballmer and a
generation of workers into billionaires and millionaires - Microsoft
has a market capitalisation of $US230 billion ($339 billion), more
than $US60 billion in revenues and $US17 billion in net income.
It's a mammoth machine with about 90,000 employees.
The software company and maker of the successful Xbox has been
lampooned for Zune, its slow-moving answer to the Apple iPhone, and
for problems with its Vista software. It is pinning its hope for
growth on Windows 7 and the new domain of cloud computing.
Ballmer reckons there's a lot more innovation to come in the search
department, and that the dominant operator has been pretty slow-moving
itself. "When you go search are you really usually looking for a set
of websites?" he asks. "No. You are looking to get something done.
You're trying to buy some flowers, not 10 links to a place to go to
"Search hasn't changed for six years. You still get the same dull,
boring 10 blue links. Can't we do anything better than that? The
opportunity to innovate is high.
"Either we will be successful or the market will stagnate, because we
know everyone needs a good competitor.
"We just want the other guys in this business to have a good
competitor that they have to think about every day."
Asked about the financial crisis and the impact on the United States
economy, Ballmer says he's worried less about the downturn that the
company's own particular issues.
"We have some things we need to do, and will do, in terms of slowing
the rate of expense growth in the company, becoming more efficient in
some areas we probably should be more efficient in anyway," he says.
"But at the end of the day, the key message I put out to employees is:
Hey, we have a bright future. Let's keep pursuing it."
Ballmer says he is surprised at the levels of fear afoot."Certainly we
are not immune," he says. "The IT business overall has more potential
to see volatility in terms of its overall results, but there is a lot
of fear in the market."
Does he get fearful? "About the economy, not at all," he says. "Can't control it. Can't do
anything about it. It affects our competitors the same way it affects
us. Doesn't scare me at all.
"The things I spend my time thinking about is: Do we have the right
people? Are we investing in the right areas? Do we have the right
innovation strategies to grab the future to compete with the guys we
have to compete with?
"Our business is one in which things do suffer dislocation over time.
Are we embracing the big trends and changes or do we get stuck in past
success formulas? Those are the things I make sure I am putting plenty
of my energy and brain power on, as opposed to: I can't control the
What Ballmer finds exciting is the future we can only see glimpses of
just now. Natural language, touch screen, real time access,
everywhere. "At the end of the day, most of what's going to happen in
the next 10 years hasn't been invented yet anyway," he says.
Do they have the right strategy?
"I think so. We improve our strategy and we improve our execution.
This week Google, the No. 1 search engine, and second-placed Yahoo!
failed in a bid to tie up after threats of a legal battle with the US
"Yahoo! CEO Jerry Yang was quick to say he was ready to return to the
bargaining table with Microsoft."
But Ballmer, who offered $US33 a share for the company not too long
ago, say's he's no longer interested.
"We made an offer," he says. "We made another offer. It was clear that
Yahoo! didn't want to sell the business to us and we moved on. We
tried at one point to do a partnership around search and that didn't
work either. We are not interested in going back and relooking at an
acquisition. They turned us down at US$33. Move on."
Fairfax Business Media
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