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Tuesday, May 09, 2006

Computer Business News: Microsoft Plans Transformation to Better Compete With Google

CEO of Microsoft Steve Ballmer recently supported spending plans for the top computer business that have resulted in declining stock prices in an internal memo. In the week-long period from April 27 – May 3, the stock price of Microsoft fell by 12 percent.

Ballmer stated that Microsoft has remained a computer business leader because it has taken risks and made bold plans. The memo intended to reassure employees was sent via e-mail, and excerpts from it were posted on several newspaper websites.

Ballmer went on to state that Microsoft needed to seize opportunities and continue to match competitors and customer demands forcefully. When Microsoft released its spending and investments for the third quarter, there was a discrepancy between actual and estimated for 2007 that totaled $2.4 billion. Microsoft stood behind its results, stating it was going to increase spending to help it compete with Google and other emerging and large computer business companies.

The memo released via email was more specific about the plan, stating increased investments in its Xbox game console, the new Windows Vista package and Office 2007 line along with increased online items.

Ballmer also said that Google specifically motivated a lot of Microsoft’s spending. He claimed that it was a goal of his to create the Web’s largest ad network and creating a search engine, “adCenter” that will help its services in the computer business and to compete directly with the large company. Expected to launch this summer, adCenter is Microsoft’s version of Google’s AdWords, the multi-billion dollar online ad platform.

The leaked memo hasn’t had much effect on Microsoft’s stocks, which have continued to fall since the announcement.

Blogged By: Computer Consulting 101