Sunday, December 11, 2005

The Citizen's extended Q&A with Microsoft CEO Steve Ballmer

The Citizen's extended Q&A with Microsoft CEO Steve Ballmer: "Q: Your stock price has been relatively flat over the last few years. Is that a concern to you and what do you plan to do to get the markets excited about Microsoft's stock again?
A: (Nearly shouting, face reddening) Grow! We've done a lot of growing over the last five years, and our stock as you've pointed out has been basically in a flat line. I can't control how the markets see us. I have some ability to control what we really do. At some point we'll have grown so much, our stock price will have to go up. Our operating profits pre tax in the last five years are up 70 per cent--70 per cent!--and the stock's been flat. If our operating profits are up another 70 per cent, I challenge the stock to stay flat. There's really two things we can do. Number one, We can really drive innovation, number one. Innovation in the short term can take a hit on earnings, but in the long run innovation drives operating profit, and operating profit is the number one driver of the stock price. The other thing we can do is figure out what to do with the cash on behalf of our shareholders. You've seen us be much more aggressive in returning cash to shareholders, both through our annual dividend, our one time dividend, our share repurchase. So we're working both of what I call our capital structure side and our operating side. "
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