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Steve Ballmer had some choice words for doubters of Microsoft's Facebook purchase

Microsoft Corp. Chief Executive Steve Ballmer spoke with reporters on Monday at the sidelines of a business conference in Mumbai.  He countered the negative analyst reaction to the Microsoft Facebook relationship, reported by DailyTech last week, and satirized via a Binary Heroes installment.

Analysts say that Microsoft's $240 million dollar investment was a steep price to pay for what it was getting in terms of advertisement space, and was a big gamble based on hopes that Facebook will further evolve beyond just a social networking tool into something more.

Steve Ballmer countered these criticisms, stating, "We didn't make a mistake.  The valuation of Facebook is still to be determined. Certainly today, it's very, very popular. So for a company like ours that wants to be a pre-eminent presence in this space, it's very important for us.  Will Facebook be worth $5 billion, $15 billion or $50 billion some years down the line is really up to their team and how they take it forward."

What Ballmer failed to acknowledge is that whether Facebook is worth $5 billion USD or $50 billion USD down the road does have a major impact on the returns Microsoft can hope to get on its investment.

Ballmer, who shares a penchant for controversial statements with Apple CEO Steve Jobs, has been a major voice at Microsoft ever since he joined the company at request of Harvard classmate and best bud Bill Gates.  Ballmer recently waxed on his relationship with Bill in a piece on DailyTech, in which he compares his relations to Bill to a marriage -- one that has produced many, many children.

During his encounter with the press on Monday, Ballmer was also questioned about rumors that Microsoft might acquire Yahoo in hopes of mounting an offensive against Google in terms of advertising and internet search capabilities. 

This speculation follows recent development that Google is continuing to dominate the web with preparations nearly complete on a GMail 2.0 rollout and IMAP support now implemented for GMail.  It also follows the news breaking announcement from Google that it will be rolling out its new open-source mobile OS dubbed "Android OS" in mid 2008 in direct competition with Symbian OS and the less widespread Windows Mobile OS.

Microsoft's next move against Google remains a mystery though, as Ballmer remained mum on the Yahoo rumors, saying only, "My answer is a considered 'no comment'."  However, Ballmer could not help but go on and give a bit of a comment saying, "We want to succeed in the online advertising space. What happens with Yahoo, we'll all have to wait and see."

Ballmer is visiting China today and discussed how important the Chinese market is to Microsoft.  He said that China is closely cooperating with Microsoft in dealing with its concerns about intellectual property (IP) rights.

More than a fifth of computers running on Microsoft software are running on pirated copies, with piracy particularly rampant in China.  Microsoft is hoping that recent crackdowns will help to boost legitimate sales in China.  In July an FBI and Chinese government probe netted over 500 million USD in stolen software, most of which was Microsoft and Symantec products.

Ballmer had mixed remarks on China.  He said, "We've made some progress, and there's better respect for software intellectual property there than there was three years ago.  That said, it's still lower than in a lot of other countries. So depending on how you look at it, life's getting better, or life's bleak."

Ballmer's remarks come following Microsoft best business quarter since 1999.  However despite record setting Halo sales, the giant has had some stumbles this quarter too.  Game retailers Gamestop and EB Games ended their XBOX 360 replacement plan, to cut losses occurred by frequent warranties which included the dreaded "red ring of death" (RROD).  Also, Microsoft's new Unified Communications initiatives have been criticized due to its insistence on proprietary standards.  In addition, Microsoft is facing rejuvenated Apple Leopard OS sales, as reported by DailyTech.

Still despite these obstacles, Microsoft has continued on throughout this year with bullish success, and will likely continue to do so for the foreseeable future.





"Game reviewers fought each other to write the most glowing coverage possible for the powerhouse Sony, MS systems. Reviewers flipped coins to see who would review the Nintendo Wii. The losers got stuck with the job." -- Andy Marken
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