updated 10/18/2004 3:33:56 PM ET 2004-10-18T19:33:56

Microsoft Corp. is considering creating Russian versions of its Hotmail e-mail program and Microsoft Network online service, company CEO Steve Ballmer said in an interview published Monday.

Microsoft has started a test project of selling an easier version of Windows XP software in Russia designed especially for starters and users of cheap computers. (MSNBC is a Microsoft - NBC joint venture.)

Ballmer added, however, that the company doesn't expect Windows XP Starter Edition to win a significant share of the market in Russia as the Russian government doesn't support sales of cheap computers.

Lack of state support for cheap computers sales is seen as the reason for Russia's low PC penetration rate of 12 percent, including office PCs.

Ballmer said that about 5 million Russians are currently using Hotmail. He said the company was mulling creating Hotmail's Russian version, but offered no details.

Ballmer said that the level of piracy in Russia is still one of the highest in the world, adding that it has prevented Microsoft from presenting its Xbox game console at the Russian market.

Copyright 2004 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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