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October 5, 2009 12:01 AM PDT

A CNET Conversation with Steve Ballmer

by Ina Fried
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REDMOND, Wash.--Steve Ballmer is never at a loss for words, but that doesn't mean he always spills the beans.

Such was the case with the top-secret Courier dual-screen tablet that Microsoft is said to be working on.

As part of an interview for our new CNET Conversations program, Microsoft's chief executive said he had nothing to say about the product. "I really don't," he told me and CNET TV colleague Molly Wood. (My sources tell me the project is real and that Courier is one of many prototypes, though that's about all I've managed to learn so far.)

The video of our interview is embedded here. For the full interview in text form, check out the transcript on the CNET Conversations Web page.

Ballmer was not similarly tongue-tied when it came to talking about his optimism for technology, his thoughts on the economy, or his company's competition with Apple and Google.

As for the economy, Ballmer said that things aren't getting worse, but didn't want to go as far as Google CEO Eric Schmidt who recently declared the economy is improving.

"Well, I think any sort of forecast at this stage is probably a little bit premature," Ballmer said. "Thank goodness we haven't fallen off a second cliff, which certainly in some economic times we have, but unemployment rates are still high and growing, so it's a little hard for me to say the worst of the recession is behind us when there's still a lot of families both out of work and more families out of work every day."

He said he still has his fingers crossed. "I don't think things are getting worse, but I don't think they're getting a lot better yet either," Ballmer said. He is due to talk more on this subject in a speech in London on Monday.

As for Google, he acknowledged them as a "genuine competitor" in Microsoft's core businesses of Windows and Office, but said that Google Apps isn't necessarily a stronger product than others such as OpenOffice or StarOffice.

"This one is not any better than the ones that have preceded them," Ballmer said. "I mean, I've not seen anything from Google that makes them look better than the other guys we've competed with...They're better funded. You know, they're making money hand over fist in the search business, so they can afford to (compete). Even if they're not successful, they're well-funded."

And while Apple's advertising may be portraying the company as hipper than Microsoft, Ballmer said Apple's ads largely appeal to the company's existing fans. Microsoft's Windows campaign, he said, is aimed at the rest of the market.

"They've done a very good job of marketing to their 3.5 percent of the market," Ballmer said. "I'm glad we're doing a great job with the other 96.5 percent."

One needs to have a different approach to appeal to the masses, Ballmer said. "They advertise basically to that small niche of people who want their machines. And I don't take it away from them; they make a very good business doing it," he said. "So, we need to have messages that are appropriate to the vast majority of people, and it's fine. There may be 3 percent of people who sort of appreciate their approach."

On the mobile front, Ballmer acknowledged that the situation isn't quite the same, but said he is pleased with the progress Microsoft is making, though he didn't offer any new details on what the company is doing beyond the Windows Mobile 6.5 devices that go on sale this week.

"I think that's going to be a big step forward," he said of the new phones, which Microsoft is pitching as "Windows phones."

"We're just going to keep (coming out with) new releases, new releases, new releases," Ballmer said. "At the end of the day, I think the model of a software company partnering with a lot of handset vendors is powerful. It's powerful relative to what you see from folks like Palm and Blackberry and Apple."

Although Ballmer wouldn't comment on Courier specifically, he did say that the tablet market, which Microsoft pioneered, continues to grow and evolve.

"Oh, there's definitely a market for computers that you can mark on," he said, adding that there would be a number of new designs this fall from PC makers, plus whatever Apple eventually does. "So, I don't see that market going away, and certainly Apple -- I'm sure Apple will bring a unique point of view. They tend to bring unique points of view to things. And yet we've got great people doing great stuff, and let's see what the competition has."

During her years at CNET News, Ina Fried has changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley. These days, most of her attention is focused on Microsoft. E-mail Ina.

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by johnny_ray3g October 5, 2009 8:05 AM PDT
"They've done a very good job of marketing to their 3.5 percent of the market," Ballmer said. "I'm glad we're doing a great job with the other 96.5 percent."

I have a pc and i do like macs but whatever your product or preference you have to admit, that was a pretty good quote! LOL
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by myles taylor October 5, 2009 8:45 AM PDT
@johnny_ray3g If that wasn't total BS it would be a good quote. The real numbers are impressive enough, why did he have to fudge them? No they are doing a crappy job with their percentage, whatever it is. Just because you have the dominant market share doesn't mean you're the best.
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by djames42 October 5, 2009 10:22 AM PDT
"They've done a very good job of marketing to their 3.5 percent of the market," Ballmer said. "I'm glad we're doing a great job with the other 96.5 percent."

I see. So Microsoft isn't at all concerned with Apple's marketing. That certainly explains the millions they've poured into marketing trying to directly counter Apple's advertisements.

Ballmer is the biggest baffoon in corporate history. I can't believe the board hasn't canned him yet.
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by soidl October 5, 2009 11:53 AM PDT
This was an excellent interview and I believe that it shows that Microsoft really does not have the focus that it once had under Bill. Molly made an excellent point in that Microsoft is in all of these different areas but do not have an integration strategy. Ballmer really did not have an answer for that question. He looked as though it was something he had not considered. But really if Microsoft did have the M-Life, then the SEC would break up the company in a heart beat.
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by DarkerRaul October 5, 2009 12:11 PM PDT
I'm not quite sure what Microsoft's ad campaign is because it changes about every month. At least when an apple commercial comes on you know what company it is. Microsoft's marketing has always been atrocious.

However, I liked the Dean Cain commercials, but they were kind of random and I could never quite figure out what they were trying to promote. The one commercial with the vomit and porn was pretty interesting. The only audience that that would appeal to is people who want to download disgusting porn and not get caught. The Windows 7 Party ads are just absolutely lame.

I can give Microsoft some props for having a 96% market share, but I can say with a certainty that it has nothing to do with their marketing. If anything its PC manufacturers like Sony and HP with nice hardware that does the marketing for Microsoft.

I'm also pretty sure that Apples advertising appeals to a much larger demographic, even if they can't afford one. I really like Porsche, and their ads are really cool, but It doesn't mean I'm going to go out and buy one.
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by infiltrator_01 October 5, 2009 1:18 PM PDT
I'm disappointed with your interview. You both looked like kittens talking to a lion.

What happened to the questions us CNET users wrote to ask? I didn't hear anything worth listening to.

Why do I care what Ballmer thinks about the economy and jobs in IT? He's not an economist.

Ok, maybe Ina's last question was good. But Baller didn't answer it.
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by krosafcheg October 5, 2009 5:12 PM PDT
Since Ballmer took over in 2000:

AAPL: Up 1600%
MSFT: Down 10%
Reply to this comment
by bradward747 October 5, 2009 5:54 PM PDT
Uh its not 3.5% its 12% but point made apple does tend to market well for its focused environment and Microsoft does well with all the rest.
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by rappertoo October 6, 2009 7:27 AM PDT
Ballmer strikes again - with a relatively long and say nothing post that looks like an interview! How many net interviewers actually know what an interview is like?

This is more Ballmer Drivel and takes up a whole page.
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by gedge72 October 6, 2009 7:37 AM PDT
According to Steve Balmer in an interview on the bbc news site, 3% isn't so bad anyway:

"There's one business, search, in which google is very strong. And sure it's the toughest competition, we have I think here in the UK 3% market share and they have 85%. But in a sense that's kinda fun. Every day is a good day, we get a chance every day to improve...it's not so bad."
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by richard993 October 6, 2009 3:51 PM PDT
I'm not sure why Steve Ballmer is adding to the confusion. There are six editions of Windows, not three. Five of those editions have different features and the only two that are similar are Ultimate and Enterprise.

These are the editions that are available: Starter, Home Basic, Home Premium, Professional, Ultimate and Enterprise. I don't think starter, home basic, home premium and professional are ideal especially on Laptops since only Ultimate and Enterprise have bitlocker.
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by WildBoarHunter October 6, 2009 7:47 PM PDT
Why is it that when I search for Conversations at CNET I find anything but this page, yet when I go to Google, tada! Do you have the search engine rejects at cnet? Is it the policy of CNET to fill the quota of disadvantaged search technicians? Molly and Ina deserve better then this. Come on, do at least mediocre work. I mean you don't work for the government do you?

This post will be blocked,
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by VaxVms October 14, 2009 4:41 AM PDT
Two words Google and Chrome. The only hope for the 'generic' pc. Snow leapard is currently the benchmark client OS imho and has been for the last 6 years at least(I'm a J2ee dev and use it at work) but OSX will always have driver/incompatibilty issues on generic hardware (beleive me I've tried!). I also use Solaris10 (the 'daddy'), and XP (oh dear) on my works MacBook, but must admit Snow Leapard is amazing and you can run pretty much anything on it (*nix apps, mac, windows, linux, even MS 'POS' Office if you want. Also the software that comes with Snow leapord (check out Garage band) makes Win7 look like an suckers deal.
I'll consider MS when they finally release an OS that is compatible with the internet, and stop lying to noobs about malware only targeting windows because 'it's so popular'. If that's the case, how come the majority of the worlds servers that are runing *nix have no problems either? In fact when they release any half decent product, I'll take them seriously, but not before. From a technology point of view they (MS) are a sinking ship - Gates saw the iceberg and left a monkey in charge. Linux will never gain a foothold while every peice of generic pc hardware continues to carry the 'designed for Windows' sticker, that's pretty obvious, and MS know this. Chrome will however be preinstalled, and with support from Google should put the foundations in place for better computing world!
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