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MS on Trial Steve Ballmer, Microsoft's travelling CEO, is unwired from Fort Redmond, judging by some contradictory statements he has been making about the judgement - as well as a startling admission that Windows 2000 desktop sales may not be so good.

He acknowledged to reporters in Rotterdam yesterday that it was a mistake to have had Bill Gates testifying on videotape instead of testifying in court, and wished Microsoft "had taken that opportunity". He also thought that Microsoft "could have done a better job communicating how this industry works", and shown how "competition is alive and well".

As for the present, he said that Microsoft was "not making any contingency plans" to split Microsoft, which may be brave, but is perhaps a little reckless.

Ballmer is also out of synch about Microsoft's appeal policy, saying that it had not been decided whether to appeal directly to the Supreme Court, or to go to the Court of Appeals. Even worse, he demolished Bill Neukom's earlier claim that Microsoft would be allowed on appeal to present new evidence, by admitting that it was unlikely that this would be the case.

As for the consequences of the judgement, Ballmer thought they would be "disastrous", and gave three examples: higher prices for Microsoft software; less innovation; and a message to software developers that if you were "too successful" the government could "take what you've created".

In a telephone interview with the WSJ while he was in London yesterday, he said the case had not been "zero distraction", but he had spent less time on it than Gates, because "he's got the history on this" (which was a bit strange as Ballmer has been at Microsoft since the early days) but "most of it is left to the lawyers".

Ballmer wouldn't be drawn when asked directly if Microsoft was going to change its business practices, but replied: "We're not going to stop adding value and improving value and improving Windows and adding capabilities to Windows" as a result of the judgement.

Apart from the evidence of poor internal communications at Microsoft, it was a surprise that Ballmer admitted that "I don't think we've done a great job always of telling this story about how great Windows 2000 is on the desktop even if you're not implementing Windows 2000 on the server..." So there we have it: Windows 2000 professional may not be meeting Microsoft's sales expectations. It will be interesting to see what the company has to announce in its 4th quarter figures next month. Could a profits warning be on the cards? (Down Graham! - Ed) ®

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