Microsoft Corp, which bought 22 companies for about US$750 million in the past year, is planning more purchases and “long-term” investments to fuel growth, chief executive officer Steve Ballmer said.
“You ought to expect us to continue to do more acquisitions, but still primarily, small-and mid-sized companies,” Ballmer, 50, said during a press conference in Seoul. “Our pace of acquisitions continues to rise.”
Ballmer, who also announced plans to spend US$60 million in South Korea in the next three years, declined to comment on Microsoft’s budget for buying companies and didn’t name any purchase targets.
Ballmer is counting on investments to help Microsoft fend off rivals such as Google Inc even as some investors have asked the company to instead return more profit directly to shareholders.
Microsoft shares plunged 11 percent, their biggest drop in more than five years, on April 28, a day after the company said it would increase spending on its Internet unit to stem customer defections to Google. The plan called for spending US$2 billion more than some expected, prompting at least five analysts to cut their ratings on the stock.
“We are going to continue to make the kind of long-term investments that drive long-term innovation and growth,” Ballmer said yesterday. “Shareholders, I think, have appreciated the fact that we are able to grow our profits. We’ll continue to do so.”
Ballmer’s comments may not sooth investors who want the company to spend more of its money on buying back shares. Joseph Rosenberg, chief investment strategist at New York-based Loews Corp, has criticized Ballmer for not buying back enough shares to bolster the stock price and earnings per share.
Rosenberg said he told Microsoft officials the company should buy back US$60 billion in shares, half with cash and half with debt.
Richard Pzena of Pzena Investment Management LLC, which holds 14.3 million Microsoft shares, said he is seeking a meeting with Chief Financial Officer Chris Liddell to persuade him to buy back between US$30 billion and US$60 billion in stock.
Microsoft is nearing the end of a US$30 billion share buyback announced in 2004 and Ballmer is spending in areas to help compete against Google, owner of the world’s most-used search engine.
In 2004, Ballmer agreed to return a record amount to investors, buying US$30 billion of shares over four years and paying a US$32.6 billion dividend. While he accelerated the timetable, Ballmer is focusing on new projects.
Separately, Ballmer said Microsoft is “on track” for the scheduled general release of Windows Vista in January.
The company will look at customer feedback on test versions of the software, he said yesterday.
“The most important thing is to get quality right,” Ballmer said.
The release date could be moved by “a few weeks,” Ballmer said at a press conference in Tokyo on Wednesday.
Just weeks after Microsoft’s March announcement that it would need to delay the retail availability that had been planned for this year, analysts such as market research firm Gartner Inc and Rick Sherlund at Goldman, Sachs & Co expressed concern Vista will slip further into next year.
Windows is Microsoft’s biggest and most profitable product and the two-year delay in Vista has eroded sales growth.
ROLLER-COASTER RIDE: More than five earthquakes ranging from magnitude 4.4 to 5.5 on the Richter scale shook eastern Taiwan in rapid succession yesterday afternoon Back-to-back weather fronts are forecast to hit Taiwan this week, resulting in rain across the nation in the coming days, the Central Weather Administration said yesterday, as it also warned residents in mountainous regions to be wary of landslides and rockfalls. As the first front approached, sporadic rainfall began in central and northern parts of Taiwan yesterday, the agency said, adding that rain is forecast to intensify in those regions today, while brief showers would also affect other parts of the nation. A second weather system is forecast to arrive on Thursday, bringing additional rain to the whole nation until Sunday, it
RETHINK? The defense ministry and Navy Command Headquarters could take over the indigenous submarine project and change its production timeline, a source said Admiral Huang Shu-kuang’s (黃曙光) resignation as head of the Indigenous Submarine Program and as a member of the National Security Council could affect the production of submarines, a source said yesterday. Huang in a statement last night said he had decided to resign due to national security concerns while expressing the hope that it would put a stop to political wrangling that only undermines the advancement of the nation’s defense capabilities. Taiwan People’s Party Legislator Vivian Huang (黃珊珊) yesterday said that the admiral, her older brother, felt it was time for him to step down and that he had completed what he
CONDITIONAL: The PRC imposes secret requirements that the funding it provides cannot be spent in states with diplomatic relations with Taiwan, Emma Reilly said China has been bribing UN officials to obtain “special benefits” and to block funding from countries that have diplomatic ties with Taiwan, a former UN employee told the British House of Commons on Tuesday. At a House of Commons Foreign Affairs Committee hearing into “international relations within the multilateral system,” former Office of the UN High Commissioner for Human Rights (OHCHR) employee Emma Reilly said in a written statement that “Beijing paid bribes to the two successive Presidents of the [UN] General Assembly” during the two-year negotiation of the Sustainable Development Goals. Another way China exercises influence within the UN Secretariat is
CHINA REACTS: The patrol and reconnaissance plane ‘transited the Taiwan Strait in international airspace,’ the 7th Fleet said, while Taipei said it saw nothing unusual The US 7th Fleet yesterday said that a US Navy P-8A Poseidon flew through the Taiwan Strait, a day after US and Chinese defense heads held their first talks since November 2022 in an effort to reduce regional tensions. The patrol and reconnaissance plane “transited the Taiwan Strait in international airspace,” the 7th Fleet said in a news release. “By operating within the Taiwan Strait in accordance with international law, the United States upholds the navigational rights and freedoms of all nations.” In a separate statement, the Ministry of National Defense said that it monitored nearby waters and airspace as the aircraft