Steve Ballmer Warns Financial Crisis Will Impact Tech Sector
By Tom Foremski - September 30, 2008
Last week, Steve Ballmer, CEO of Microsoft spoke at the CHurchill Club in Santa Clara. He was asked about the effect of the economy on the IT industry. He didn't seem too worried by the crisis.
Earlier today, Mr Ballmer changed his views. Speaking at a news conference in Norway, Reuters reported:
Financial issues are going to affect both business spending and consumer spending, and particularly ... spending by the financial services industry," Ballmer told reporters on the sidelines of a news conference in the Norwegian capital.
"We have a lot of business with the corporate sector as well as with the consumer sector and whatever happens economically will certainly effect itself on Microsoft," he told Reuters.
"I think one has to anticipate that no company is immune to these issues," he said, but declined to be more specific.
Wall Street analysts, on average, expect the Redmond, Washington-based company to generate an 8 percent rise in revenue to just under $15 billion in its first-quarter ending in September.
"There are parts of our every business which are probably 'safe' in the sense that it's not like our business would go to zero," he said in an interview.
"On the other hand, when businesses have less money -- they can borrow less money, they can spend less money -- that can't be good. When consumers feel the economic pinch, house prices come down. That can't be good," Ballmer said.
Microsoft shares rose 2.9 percent to $25.73 at 11:17 a.m. EDT in a broader U.S. market rebound following a sharp slide on Monday.
But Ballmer's comments weighed on the shares of German software maker SAP AG (SAPG.DE), which fell 2.0 percent and were among the heaviest fallers in Germany's DAX index (.GDAXI).
Here is what Mr Ballmer said last week:
http://www.blip.tv/file/1308910Here is the entire Steve Ballmer talk:
Yahoo and Blip.tv
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September 30, 2008 | Permalink | Comment | Subscribe to SVW
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Comments (1)
Hi Tom,
It's become widely recognised and reported now that the financial crisis is and will continue to impact the tech sector. In order to survive, new start-ups will need to define revenue models upfront and will no longer be able to rely on the old "web 2.0" approach of first launching and only then worrying about revenue strategies at a later stage. For those types of companies, VC funding will be scarce.
Posted: October 2, 2008 8:31 PM