www.usatoday.com/money/companies/management/2007-04-29-ballmer-ceo-forum-usat_N.htm
CEO, Microsoft Born: Detroit Education: Bachelor's degree in mathematics and economics, Harvard University. Dropped out of Stanford University business school after first year. In college: Managed the football team, was business manager of The Harvard Crimson newspaper and worked on the university literary magazine. Fateful encounter: In sophomore year at Harvard, he lived down the hall from Bill Gates. First job: Assistant product manager for Duncan Hines' Moist & Easy cakes and brownies. His cubicle mate was Jeffrey Immelt, now CEO of General Electric.
By David Lieberman, USA TODAY SEATTLE -- It's a good thing that Microsoft CEO Steve Ballmer has so much energy. He recently introduced two key products designed to strengthen Microsoft's control of personal computers: the Vista operating system and the Microsoft Office 2007 suite of applications. Strong starts for each helped fuel a 65% profit surge in the just-ended quarter. Efforts to expand into other fast-growing markets pose big challenges. The Zune music player has made scant inroads against Apple's iPods. The division that includes its Xbox 360 video game console lost $315 million in the quarter. And MSN Search attracts 10% of online searches, according to Nielsen/NetRatings MegaView Search.
Ballmer says he's confident his investments will pay off over the long term as rivals such as Google take the early lead in emerging businesses on the Internet. Ballmer was interviewed by USA TODAY's David Lieberman at the sixth USA TODAY CEO Forum, in conjunction with the University of Washington Business School. A: I'm the only person you'll ever interview who has been the No. Every day, I've had a bigger challenge than I had the day before. I will say the job of being CEO was more different than I ever could have guessed when Bill asked me to take it. A: Just flipping around from junior partner to senior partner, you really feel a different kind of an accountability, as amazing as that might sound. I never would have believed I could feel more accountable than I already did for Microsoft. And the CEO in a lot of ways becomes the icon for many things in the business. There's just a set of subtle twists that I really didn't have my mind fully wrapped around until two months or three months or four months after Bill actually asked me to take this job. They said, "We're going to introduce you to three CEOs, and you can learn from them." As it happened, one of them was (former Enron CEO) Jeff Skilling. I'm glad I didn't learn everything I was supposed to learn from him. You sit there, and you exchange stories, and you learn from other guys' experiences. What's the best way that you've found to communicate internally, externally?" We get a chance to change the world through the kinds of products we build. if I don't like my job, I guess because you're the CEO, you should change your job so you like it more. And you go, "OK, well, I'll go add somebody to help me with that; On dealing with the competition Q: A few years ago, the Justice Department investigated Microsoft and charged it with anti-competitive practices. A: In all things that are emerging, there are questions to be asked. If the regulators decide there's an issue there, they'll take a look at it, and if they decide there's not, so be it. I do think that it would be worth the regulators taking the time to understand this market, much the way they took the time to understand other parts of the technology business, because the whole future of media and advertising will move to the Internet. What we think of as television today, what we think of as newspapers, magazines, you name it -- all of those things are going to move to the Internet and be funded by advertising. And so we're talking about a pretty important part of ... Q: Can you give us some insight into your thinking with DoubleClick? It would have done a lot for MSN, but you let Google outbid you. You know that they signed a definitive agreement to buy DoubleClick. It's in third place, and that's a tough place to be in the search market. Yahoo actually has people spending the most total time with them. The real question is what's going on in the commerce and advertising side. Most websites rely on DoubleClick or Google or Yahoo for our stuff to run. Q: There's nothing that you have to change to become more competitive? Let's just start with the fact that at the end of the day, since this is a business school, people probably will say that the scorecard says, "Who makes the most money?" There's a whole lot of opportunity to innovate on the end user side, and we're only scratching the surface. Today, a very small percentage of all advertising has moved to be essentially online. As TV experiences, video experiences, radio experiences move online, there's going to be a lot of innovation on the advertising side. Q: You must have some time frame when you expect MSN to become profitable. We decided to take the business to be less than zero profit because (we're) making the R&D investments and the sales and marketing investments that we think are necessary for the long term. Above all, I would say one of the things I believe in that has made Microsoft a great company is we take a long-term view. It took a long time for music players -- not the iPod, but for music players -- to reach critical mass. The guys at Google were at it, what, eight or nine years before they really reached critical mass. And so one of the keys in our business is not to be impatient in the wrong way. I've seen that kill a lot of other companies in our business. On management Q: You're a strong personality, and so is Bill Gates. If you really want to sail your ship this direction, you want enough groupthink that people actually sail with you, and not so much groupthink that people don't do other things innovative on the path, or that people won't second-guess fundamental assumptions before you set course. But once you really set course, you really don't want a cacophony that prevents progress. If anything, I think Microsoft tends to err on the side of having less groupthink and more cacophony than most other places. Q: You don't find you've got a problem with people saying, "Sorry, but I really think you're wrong here"? From 10 this morning until I came over here, I got more "Steve, that's wrongs" than I got "Steve, that's rights" today. I would tell you that most companies in our business never go to market in more than one way. They're one-trick ponies, because there is a lot of groupthink in all companies. I think we've actually done better in saying we're going to have (more) multiple ways of thinking than any organization in our industry, and I count that as one of our great achievements as a business. Q: Do you have any formal processes to be sure that you're getting the best ideas from everybody, or is it something you just count on? We have four leaders of the business who see it through different eyes. We have a research group that sees things through its own eyes, and the eyes of university professors and academics, because there are eyes and ears out in the academic community. We have the eyes and ears of our finance group, which is out talking to start-up companies, venture capitalists, private equity, alternative business models, what's coming, what's on the horizon. Really understanding the power of advertising as an Internet business model we came to later than I wish we had. So, it doesn't mean we get a perfect outcome at all times, but we certainly have a lot of formal checks and balances in our system that push us along. Q: One of the interesting things about your career is that you and Bill Gates have really been kind of married all these years. Have there ever been times when you felt like throttling the guy? A: We were learning to find a pattern of interaction that would let us be partners and be married, but we changed the state of affairs. We had a crisis after a month, but because it was important enough and we're dear enough friends, we worked through it. At the end of the first year, we really had to say: Is this permanent? And then for many, many years, Bill was kind of the senior partn...
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