Newsmaker: Steve Ballmer
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JIM LEHRER: Finally tonight, Steve Ballmer, CEO of Microsoft. He’s here for a Newsmaker interview, a companion to the one we did with Assistant Attorney General Joel Klein last Thursday. I spoke with Mr. Ballmer this afternoon from Redmond, Washington. Mr. Ballmer, welcome.
STEVE BALLMER: Thanks very much, Jim, pleasure to be here.
JIM LEHRER: Have you and your colleagues begun to work on plan a way to possibly break up Microsoft into two companies?
STEVE BALLMER: Well, we stay very focused in on really a couple things. Number one, we’re focusing in on continuing to drive forward on a broad spectrum of activities. There’s a lot of competition and innovative things that need doing. Number two, given the differing opinions we’ve had on some of the issues, between the district court and the appellate court, we’re hard at work at our appeal, so we get some clear direction out of the judicial system.
A plan to break up Microsoft?
JIM LEHRER: So you’re not working on a plan to break up?
STEVE BALLMER: No. I mean, if that would happen during the course of this thing, I suppose, but right now we have asked for a stay motion and of course we plan on appealing.
JIM LEHRER: So the strategy in a nutshell is you’re going to follow the appeals to their conclusion, and you’re not going to take any steps, any preparation, any, draw any possible ways to actually divide this company until that happens, until the appeals are exhausted?
STEVE BALLMER: Well, I think that would be a fair characterization. We want to make sure we’re doing the thing that best serves our customers, which is to make sure that we retain the ability to continue to do the kind of innovative and customer focused work, as a single company, that we think our customers deserve and desire.
JIM LEHRER: But what’s the reasoning between not going ahead and at least beginning to work on the outline? Because you are under a court order — it can be stayed and it can be reversed on appeal, but you’re under a court order to break the company into two, and for you all to come up with a plan for doing so. But you’re not going to work on that now?
STEVE BALLMER: Well, we will certainly comply with all final orders that are required of us by law. We’re absolutely — we’ll do that. We think right now we really need to put our energy into some other areas.
Taking the case to the Supreme Court?
JIM LEHRER: Are you going to agree with the Justice Department’s request that this go directly to the Supreme Court?
STEVE BALLMER: Well, that really will be a matter, I think, ultimately for the Supreme Court to decide. We want to make sure we have our day for appellate review, we think there are good panels and good ways for this thing to be heard at both the appellate level and the Supreme Court level.
JIM LEHRER: So you don’t want it to go directly to the Supreme Court?
STEVE BALLMER: Well –
JIM LEHRER: You don’t want it to bypass the appellate court?
STEVE BALLMER: There’s a prerogative for it to go both places. This case can’t bypass the appellate court. Only the federal case I think might be able to go directly to the Supreme Court. The state’s case I think has to go to the appellate court.
JIM LEHRER: Yeah. But the federal court, well, let me — Assistant Attorney General Joel Klein was on this program last week, and here’s what he said about this. He said they, meaning Microsoft, they are under a court order to break up. They have all their employees, all their shareholders, a whole industry that’s affected by this. This is significant stuff. Why wouldn’t they want it expedited? After all, the Supreme Court is the highest court in the land.
STEVE BALLMER: Well, we certainly think that the appellate court has had a chance to review this case before — the appellate court is the only court that could review both the state and the federal case. We think it’s fairly inefficient to have that thing broken up into two separate cases where we would have to be working on the appellate case, on the state case in the appellate court and the federal case at the Supreme Court. But, you know, either way we plan on pursuing our appeal.
JIM LEHRER: Sure. But what I’m trying to get at here, clearly it’s not your strategy or your decision at Microsoft to get this thing over in a hurry, is that correct? Is that a correct reading of your strategy?
STEVE BALLMER: Well, we would certainly like this thing to resolve itself as quickly as possible, but we think the appellate court is in as good a position to do that as the Supreme Court. And that’s why we’re anxious to get our appellate date in court, at whatever level in the process that is appropriate.
JIM LEHRER: Back to the court order that is pending at this moment, here again Mr. Klein said on the program that the breakup remedy would be much less intrusive to you and others who are involved in these two companies than it would be for the federal government to come in under a court order and try to enforce its will under antitrust laws. Do you agree with that as a basic premise?
STEVE BALLMER: Well, I think Mr. Klein is sort of ignoring the basic facts of his proposal. His proposal calls for a very draconian regulation of the Windows company. So the fact that there’s a breakup involved here doesn’t keep the federal government out of the process. The proposal that Mr. Klein made is a proposal for government regulation of the Windows company.
JIM LEHRER: Some have suggested, Mr. Ballmer, since last week that one of the reasons, underlying reasons, spoken or unspoken that you all a so determined to fight this is because Microsoft is such a personal company, in other words many of the founders are still in place — unlike say when AT&T faced antitrust investigations and IBM and all of that. Is there some validity to that?
STEVE BALLMER: Well, I think you would find that we think we’re pretty rational people despite the fact that we do have some people that have been around a long time. And our real goal is to do the right job, improving our products, and having an opportunity in a very competitive industry that we find ourselves in to continue to do great work. And I think we are more than happy to be practical and rational about that. And yet we don’t see that we’ve had that option certainly through the mediation discussions, which unfortunately weren’t able to lead to a conclusion. And we do think the law is quite clear in guaranteeing us and guaranteeing all companies the right to continue to improve their products. We think that’s fairly fundamental to our company, and we think it will be very fundamental for us to continue to pursue that point.
JIM LEHRER: What would you say to Mr. Klein — here again last week he said on this program that you all, meaning Microsoft, sort of walked away from the facts and the evidence in this case, in not acknowledging that you violated federal antitrust laws, end quote.
STEVE BALLMER: Well, certainly we saw the appellate court — the appellate court in this situation — be fairly clear about the right that we have to continue to add value to increase the value that Windows brings to consumers. And I think that’s the fundamental dialogue that we’re having. The district court clearly disagreed in some aspects with its own appellate court in this decision. And that’s why we think it’s important to hear from the appellate courts what the real standard is. We think the appellate court was clear. If integration provides plausible benefit, it ought to be allowed to proceed. We think we’ve demonstrated dramatic benefit to users by the new capabilities, like Internet browsing, that we’ve included into Windows.
A PR campaign?
JIM LEHRER: Well, let’s go beyond some of the specifics of the legalities of this. Thomas Friedman, the New York Times columnist, wrote last Friday, quote, Microsoft isn’t a threat just because it’s big. GE is big, Intel is big, Cisco is big. Microsoft is a threat because it is big and deaf to some of the bedrock values of the American system, end quote. And he’s referring to an acknowledgment that the federal government and antitrust laws are a part of the system of the United States Government. Is he wrong about that?
STEVE BALLMER: I absolutely support the antitrust laws in this country. I believe in them very passionately. And I believe the antitrust laws are there to encourage companies to innovate, to have products at low prices. I think the appellate court has set out a clear standard. And we respect those laws. I can’t tell you how much I respect the laws and our company respects the laws in this country. We clearly need to have a consistent reading of those before this case is over.
JIM LEHRER: So when Mr. Friedman says that the attitude at Microsoft is that you consider the federal government kind of irrelevant and an obstructionist to the functions of your company, he reads you wrong?
STEVE BALLMER: He reads us wrong, absolutely. I think the federal government has an appropriate role to play in a variety of issues that affect our company, and the high technology industry including antitrust, and we think it’s important that we have clear framework and the government has an appropriate role in that.
JIM LEHRER: So you do not — do you deny the federal government the right to in the beginning to even have, have investigated you for antitrust allegations?
STEVE BALLMER: No. I think it’s perfectly appropriate for the federal government to investigate our company or any other company where they think there may be some issue as it relates to antitrust violation. I continue to believe and certainly the interpretation we’ve seen from the appellate court would only cause us to believe more strongly, though, that in the actions that we have pursued, actions which bring value to customers, which show the fundamental competitiveness of our business, that those actions are actually consistent with the antitrust law, not inconsistent with the antitrust law.
JIM LEHRER: Well, Mr. Ballmer, where did this idea get started that you all are arrogant, that you all really don’t area what anybody in Washington thinks and that you’ll go about your business any way you want to and if they can come and get you and force you to do something you’ll do it, but that’s it?
STEVE BALLMER: It’s a complex thing. When you disagree, as we disagree with a judgment and a ruling that has come out, and we disagree in the spirit of great respect for the law, is the issue to say no we were wrong, or is the issue to pursue the basic right given to all Americans and all American companies to continue to pursue your lack of liability, your innocence, if you will, through the judicial process. We think that’s the appropriate and right thing to do out of respect for the views of, out of respect for the laws in this country.
JIM LEHRER: In other words, Microsoft has the same rights of every other American, that’s what you’re saying?
STEVE BALLMER: I think our company has the same right that every other company has, and certainly that’s what we’re trying to do right now is exercise those rights.
A lasting message
JIM LEHRER: There have been stories today about your company launching a major public relations and lobbying effort against this breakup. What’s that all about?
STEVE BALLMER: Well, I do think it’s important for us to quite broadly make sure we’re engaged in dialogue with the American people, and with all aspects of the US Government, to make sure that our point of view is well articulated and well heard. Of course at the end of the day we will comply with, you know, all final judicial judgments.
JIM LEHRER: How big a campaign is this going to be, how expensive is it going to be?
STEVE BALLMER: Well, the campaign that we’re engaged in has been ongoing really now for well over the past year. And you shouldn’t expect to see anything that sort of in scope exceeds anything else we’ve been doing for the last year or so.
JIM LEHRER: So this is not a new thing, you don’t have a new campaign going against the breakup itself, is that right, these stories are wrong?
STEVE BALLMER: Well, not a new campaign in terms of we’ve been communicating, I would say, with the public, we’ve been trying to communicate with the public, in all aspects of government now for a year. I wouldn’t say we’re going to be particularly more noisy.
JIM LEHRER: Sure.
STEVE BALLMER: Of course, the context of the discussion will change — not only to the breakup — because the breakup is the thing that often gets highlighted — but the really extreme regulation and confiscation of intellectual property, which the Department of Justice has proposed.
JIM LEHRER: In a few words then, Mr. Ballmer, what is the message that you want the American people to have that they do not have at this point?
STEVE BALLMER: Number one, I think it’s important to the American public to understand how competitive our business is — that any company — even if it manages to stay strong for a year or so — but any company that fails to continue to improve its products and keep its prices low, that company won’t succeed. Two, I think our company has been extremely focused in on doing things which were good for consumers. I’ll admit not always good for competitors, but that hasn’t been the motivating factor. The motivating factor has been to try to keep up with lead technology, to give more people more capability, and to do so at incredibly good prices. And number three, our company is a law abiding company who will absolutely comply with the laws in this country, who welcomes the investigation that we’ve had and feels very strongly, and therefore we’ll pursue through the judicial process our right to appeal, and really get a final judgment through the US legal process.
JIM LEHRER: All right. Mr. Ballmer, thank you very much.
STEVE BALLMER: Thank you very much. It’s been a pleasure.
JIM LEHRER: Thank you.