Ballmer on Windows 7, economy, Google Video

Ballmer on Windows 7, economy, Google Video Transcript

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>>[Background music] I'm Ian Fried with CNET News. I'm here with Steve Ballmar, the CEO of Microsoft who last night gave his speech at the Consumer Electronics Show here in Las Vegas. Steve obviously Microsoft didn't necessarily get everything it might have hoped for in terms of the critical response for Vista. What are you guys planning to do differently with Windows 7?

>>Well I think, you know, we made some choices in Vista to improve security at the kind of expense, if you will, of compatibility. With Windows 7 we're able to build compatibly off of Vista and really sort of just tune if you will the user interface, performance and, you know at the end of the day, it'll be what the users think of the product we're building. We'll start getting beta feedback this week.

>>How hard are you pushing the team to get Windows 7 out this year?

>>I'm not pushing the team hard. The team is pushing itself. They set some goals and objectives and of course we'll ship the product when it's, as I said last night, right and ready. And when we know when that is, we'll share that.

>>One of the biggest parts of the PC business that's really taken off amide an obviously challenging time overall is the Netbook segment. What has that meant for Microsoft, both in terms of the technology, but also from a business standpoint? How does that impact you?

>>Well, we've, we've done very well on Netbooks. When they first came out I'm not sure if people knew if they, whether they were PCs or something else. And I think everybody kind of understands now that a Netbook is a, is a small foreign factor, low cost, personal computer. And we're doing very well with Windows XP which fits. Vista does not fit and we're working hard to make sure Windows 7 fits very well on, on the Netbooks. Now from a business perspective, low cost machine, means a little less revenue per unit to Microsoft. But, you know, I think gives us an opportunity to see expansion of the overall PC market.

>>Obviously everything that you're talking about here at CES comes against the backdrop of a very challenging economy. What does that economy mean to Microsoft and its plans?

>>Well I think there's two ways that they look at it. First is what's going to happen to what's called revenue in our industry. Revenue will be lower, in aggregate, in our industry, than it would have been. And that will impact Microsoft, Cisco, you name the company, Intel will all be affected by that. With that said, our, the pace of innovation in our business will not change. The opportunity there won't change. And so the key is, how do we right size a little bit as an industry, that means different things, different companies, to adjust to the fact that revenues will be lower. And yet at the same time, keep a strong push on the R&D that's going to power the future. And each company will discuss its plans. We're kind of in the quiet period, so I don't have much to say about that.

>>Turning to search, that's obviously a key area for Microsoft. You announced a couple partnership deals that'll get you some more distribution. But clearly there aren't enough distribution deals out there to make the kind of headway you guys need to make against Google. What else does Microsoft need to really be a serious competitor to Google?

>>Just keep working. I mean look, this is not something that changes overnight. Everybody wants us to snap our fingers. We are, we have good competitor, and yet at the same time, we see real opportunities to improve the search experience, to differentiate. But it's not going to happen overnight. We're going to have to keep working and working, innovating product wise, marketing, branding, distribution. And we're going to have to be patient about it. I like our new release. We'll make, you know, we're making two releases a year. We continue attract great talent, which lets us do interesting things. Our cash back program has some early promise in terms of what I'd call business model differentiation versus Google. But we'll continue to work.

>>Fair to say four years in though you've would have hoped you'd made more progress than you guys have made so far in share?

>>Maybe, maybe. I'm not sure that would have been anything other than naive, because the market leaders is a strong company. And we're going to have to, we're going to have to keep at it.

>>You guys have said that while you're not interested in buying all of Yahoo, you would be open to some sort of a search deal. How likely do you think that is?

>>I, no way to handicap it. I think at this stage, it's probably fair to say I'm not even sure Yahoo would handicap it. They're, you know, out doing a search for a new CEO and you know we'll just have to wait and see where all that picks out.

>>You said a little while ago that there weren't any active discussions. Is that still the case?

>>Yeah, yeah, I think probably fair for us not to comment too much.

>>We've talked about Google, we've talked about the economy, which actually occupies more of your time in terms of which do you spend your time worrying about?

>>Well, I'd say, for the last, in general the answer is Google, Google, Google, Google, Google. Now, the truth of the matter is, for a period of time, for a couple of months, we do have to go through and say okay what do we really think this economic thing is. How is it, is it a year thing, or is it a reset and then we build from the new base. And how do we parse and act on the consequences. So there's a little bubble period in here, right. See I'm spending a little bit more time, but in general I can't control the economy. We can drive and control and affect our competitive position. So the lion's share of my energy would be there.

>>Microsoft in the past has been able to get through. Even some, you know, typical economic downturn by kind of trimming at the edges, you haven't had broad scale lay offs as a company. You guys have been fortunate based on your business and its relative resistance to economic downturns to kind of navigate through those without. Is it fair to say that whatever you guys have to do it'll be more significant than anything you've had to do before?

>>I, it's premature to comment. I mean the fact of the matter is, this is not a downturn. This is a bit of a reset. Those are quite different. And we're trying to really assess through what we think that means for us.

>>Thanks Steve.

>>Thanks Ian.