Ballmer: credit crunch will hit Microsoft too

 

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Posted on 1 Oct 2008 at 08:53

Microsoft chief executive Steve Ballmer says the global financial crisis will sap consumer and business spending, affecting all companies, including his own.

"Financial issues are going to affect both business spending and consumer spending, and particularly... spending by the financial services industry," Ballmer claims.

"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."

"I think one has to anticipate that no company is immune to these issues," he adds.

Wall Street analysts expect the company to generate an 8% rise in revenue to just under $15 billion (£8.3 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," Ballmer says.

"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."

Ballmer's comments weighed on the shares of German software maker SAP, which fell 3% and were near the bottom of Germany's large-cap DAX index.

Investors have taken Ballmer's remarks as an indication that Microsoft's revenues could be hurt by the continuing financial crisis. "By extension, these fears have worked their way over to SAP," a trader told Reuters.

Call for congress

Ballmer believes the US Congress will soon help stabilise the situation after rejecting a $700 billion bank bailout plan on Monday.

"I trust that before the end of the week we have some resolution, at least in the US Congress, that will help to stabilise the situation," he says. "We need that. I hope we get that."

"I have to believe that some of the issues also face the European banks and I trust that the European Central Bank will be as intelligent as it needs to be around that."

Author: Reuters