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Microsoft CEO rules out PeopleSoft bid

Microsoft on Sunday night ruled itself out of a white knight bid for PeopleSoft, the software company fighting a $7.7 billion hostile takeover by Oracle.
/ Source: Financial Times

Microsoft on Sunday night ruled itself out of a white knight bid for PeopleSoft, the software company fighting a $7.7 billion hostile takeover by Oracle.

Steve Ballmer, Microsoft chief executive, told the Financial Times that PeopleSoft did not compare with SAP, the German company Microsoft considered buying last year.

Analysts have speculated that the firing on Friday of Craig Conway, PeopleSoft chief executive, could represent a repositioning for a bid from a third party.

But asked whether Microsoft, with its $60 billion cash pile, could be that white knight, Mr. Ballmer said: "I don't think so, we like our focus on small and medium-[sized] companies, and if we weren't going to be focused on small and medium companies, you know what we wanted to buy . . . and then passed on."

Recalling Lloyd Bentsen's line to Dan Quayle in a U.S. vice-presidential debate - "I knew Jack Kennedy . . . you're no Jack Kennedy" - Mr. Ballmer said: "I know SAP, and they're no SAP."

Mr. Ballmer said SAP was not currently "on the radar screen," but "one should never say never."

Asked about competition concerns relating to any bid, he said the level of overlap between the two companies was tiny.

The Microsoft chief executive said progress could be made in the current antitrust hearings in Brussels now that enough data had been supplied to the court for assessments to be made.

"We have proved the fact that we are not religious zealots, we have an environment now where, some time over the next few months, we will get a ruling from the judge that's possibly helpful," he said.

Apple's music format unsustainable
In a wide-ranging interview, Mr. Ballmer said he thought Apple's support for its proprietary encoding format for digital music was unsustainable.

Referring to illegal downloading and the iPod, which plays music in the MP3 format and its own proprietary format, he said: "Most of the music on iPods is still stolen music and not in the Apple format."

He cited "user scenarios that just don't work", such as Powerpoint presentations that could not use Apple formatted music in the background, and predicted a level of interoperability would come.

Mr. Ballmer said Microsoft was combating piracy of its own software with cheap, scaled-down Windows "starter editions" released in Asia.

"It's a very weak product with a much lower price, it won't take advantage of all the hardware on your machine but maybe it will convert people from piracy," he said.

The chief executive was also upbeat about Microsoft's prospects in the developing smart phone market.

He said he was committed to achieving sales of more than 100 million units a year of Windows smart phones.

"It could be three years, it could be six years, but I believe we can get that kind of position."

Mr. Ballmer said he also saw an opportunity for a computer-based service that would do the work of an IT department for the consumer and small business market.