Ballmer says some stock (not his) dramatically overvalued

And AOL's nearly not a competitor after all...

A year on from knocking five per cent off Microsoft's price through careless talk about overvalued stock, Steve Ballmer has returned to the fray by describing some companies as "dramatically overvalued." But don't hit the phones - last time he blurted that this included Microsoft, but this time around he left his own company out.

Overall Ballmer thinks the stock market "is now very rational," but he didn't express a view on Microsoft's price. Although last week's results cheered up the analysts a little, Microsoft still needs a more convincing and sustained rise to keep the show properly on the road. Ballmer didn't say who he thought was overvalued, but last week he did make some sour remarks about Sun...

Steve, who's whizzing round Europe again, seems to be on form, commenting on this, that and the next thing. Yesterday in Milan he told journalists that he'd welcome the US giving the go-ahead for an AOL-Time Warner merger, because this would turn AOL into a 'US media company,' rather than a "global supplier of core Internet services."

The AOL he's talking about here may or may not be related to the AOL that 'proved' Microsoft had competition by taking over Netscape. One might surmise that as Steve's rooting for the Time Warner deal, AOL is now deemed unnecessary as a competitor by Microsoft. You might wonder how come AOL getting larger could possibly make it less of a competitor, but you can kind of see what Ballmer means. If AOL's focus shifts to the US domestic market and it gets more immersed in TV, its attention might lessen elsewhere.

But although Steve seems not to have noticed it, that goes for Microsoft too. The company is currently poised to mount a big push for MSN largely in, er, the US domestic market, and Disney's Michael Eisner is said to be backing it. Steve's focus is such that he told the WSJ earlier that he thought MSN had passed Yahoo as Europe's top portal (he must dimly remember the massaged figures) but that he'd have to check.

Today Ballmer's speaking at a WSJ sponsored conference in Paris, and by a happy coincidence the WSJ interviewed him over the weekend. His views on EU Competition Commissioner Mario Monti were amusingly guarded. "He's a politician who has a job to do and we certainly respect his doing his job," he swerved. Monti's interpretation of his job, when we last noticed, was to conclude that there was evidence of anticompetitive activities by Microsoft, and he was also recently spotted trying to get his powers enhanced so he could levy even bigger fines on offenders, and break them up.

Possibly not a man to offend then, Steve? But you'll have to do better than this: "We feel 100 per cent certain that we have behaved in accordance with (European) law. We think the statement of objections is largely motivated by and comes from (Sun Microsystems), one of our competitors..." Monti may not be 100 per cent flattered by the apparent allegation that his statement of objections was produced by Sun puppetmasters... ®

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