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Ballmer Talks Vista, Smartphones, Apple & More

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Microsoft CEO Steve Ballmer

Microsoft CEO Steve Ballmer
Source: Microsoft

SANTA CLARA, Calif. – Microsoft’s normally exuberant CEO didn’t disappoint a packed hall of over 500 attendees at an event here Thursday night. Steve Ballmer was largely upbeat about Microsoft’s products and cheerfully responded to questions about product deficiencies and competitive threats as “challenges.”

But he did start things off with one clear note of caution. “The IT economy, our industry, is not immune to what goes on in the global economy,” he warned. “And yet as I talk to people in the industry, technology and telecom, people still see a certain buoyancy in the market.” He speculated tech may be relatively better off than other sectors because it’s a global industry and some parts of the world are doing better than others. He also said the consumer side of tech is doing better than the business side. And lastly he said there may simply be confusion about, for now, about what there is to be worried about.

“No one is really sure about the credit crisis or how it’s going to be improved by the bail out,” he said.

“At least for now, the people I talk to in the business are, I wouldn’t say optimistic, but they’re feeling better than if you watched CNBC all day,” he added referring to the financial news cable channel.

Ballmer, interviewed by software venture capitalist Ann Winblad, covered a wide range of topics related to the state of the software industry and also took questions from the audience during the event put on by the Churchill Club.

While Winblad asked a series of nuanced questions about Microsoft’s direction in the software industry, one of the first questions from the audience was very direct and critical. A man identifying himself as a long time Windows user asked why mighty Microsoft (NASDAQ: MSFT) couldn’t make Windows more reliable.

Ballmer took it in stride, insisting Microsoft’s analysis of user complaints shows every version of Windows has been better than the earlier one. With Vista, he conceded some of Microsoft’s development decisions led to early compatibility problems as part of a tradeoff decision to provide better security.

He said Microsoft’s goal is “a world of no reboots and user happiness.”

Winblad asked about Microsoft’s strategy for competing with Google and he readily conceded the software giant has a lot of work to do to catch the search leader, noting Microsoft’s share of that market is only about nine percent in the United States. She noted Ballmer had predicted about two years ago that it would take five years for Microsoft to be a credible competitor to Google (NASDAQ: GOOG) in search. And then she asked if that plan was still on track and if Ballmer had acquiring Yahoo in mind when he made the five-year forecast.

“I suspect it was at least in my head,” he said.

But he also said winning in search, or any market, isn’t about using “brute force,” but redefining the experience for users and the business model.

“To go up from 9 percent in any market is going to take a while,” said Ballmer. “We’ve improved the core relevance of our search results in an amazing fashion. Vroom! The market leader has the brand; we need to try and fundamentally reinvent the search business.”

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