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Microsoft's Steve Ballmer: Vista sales expectations too 'optimistic'
[February 15, 2007]

Microsoft's Steve Ballmer: Vista sales expectations too 'optimistic'

The Associated Press

Microsoft (News - Alert) Corp. Chief Executive Steve Ballmer said Thursday that Wall Street's current expectations for revenue from its newest operating system may be too "optimistic."

"I'm really excited about how enthusiastic people are about Vista, but I think some of the revenue forecasts for Vista in 2008 are overly aggressive," Ballmer said in a meeting for financial analysts. "(Vista) is primarily a chance to sustain what (Windows) revenue we have -- not every release is a revenue growing opportunity."

Windows Vista, the company's long-delayed operating system upgrade, was released with much fanfare to consumers at the end of January. The delayed release was largely blamed for the company's 28 percent drop in second-quarter profits last month.

The excitable CEO declined to disclose specific financial guidance, but Ballmer did say he expects 2008 operating expenses to grow by less than the $2.7 billion increase in 2007.

"How much less? We'll say somewhat less. We're moderating growth in operating expenses, but I would not expect a huge drop -- just a small drop."

Ballmer also responded to a question about a series of commercials made by smaller computer maker Apple (News - Alert) Inc. The ads poke fun at Microsoft, the world's largest software company, through a geeky character who calls himself a "PC."

"I'll give Apple credit for what it's done," Ballmer said. It's not like they've really grown a lot of market share (through the commercials). Remember, when you're the little tiny niche guy who owns about 2 percent of the worldwide (computer) market, you can be cute one time and it helps you grow."

Shares of Microsoft were trading at $29.23 in the after-hours session, down 23 cents, or 0.8 percent, from Thursday's closing price of $29.46 on the Nasdaq Stock Market.

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