The $2.4 billion his company earmarked for research and development in 2006 will be money well spent, Ballmer wrote in a company-wide memo obtained by internetnews.com.
The memo came a day after Microsoft announced earnings that were shy of analysts' estimates.
Quarterly sales rose 13 percent over the same quarter last year to $10.9 billion, but analysts were looking for revenues of $11.04 billion.
''Throughout our history, Microsoft has won by making big, bold bets,'' Ballmer wrote. ''I believe that now is not the time to scale back the scope of our ambition or the scale of our investment.''
Some analysts want Microsoft to mature into a value holding for investors, even going so far as to shave $32 billion off of the company's market capitalization.
But Ballmer won't hear of it.
''Today we are poised to take an even bigger piece of an increasing number of ever expanding markets,'' he wrote. ''From the server to the desktop to mobile, we sit in a unique position thanks to our willingness to make the big bold bets.''
Analysts for SG Cowen received Microsoft's spending pledge well, noting that the questions are now about whether Microsoft will spend money in the same places rival Google has invested, such as dark fiber, data center space and engineers.