Microsoft seeks to reassure analysts

REDMOND, Wash. — Microsoft Corp. chief executive Steve Ballmer conceded Thursday there are questions about the software maker’s future, but he sought to reassure financial analysts that the company can compete against Web-focused competitors.

Still, in a sign of how nervous Wall Street is about the company’s prospects, Microsoft shares dipped 2 percent after another executive said a new version of its Windows operating system is on track to be completed as planned, but cautioned that could change if quality concerns arise.

Speaking to analysts at a daylong event on Microsoft’s Redmond campus, Ballmer told analysts: “The opportunity and prospects for innovation and growth has never been better.”

His comments came as Microsoft is facing intense competition, particularly from Google Inc., Yahoo Inc. and other companies that are increasingly offering software and related services over the Internet to both consumers and businesses.

Some of those competitors could eventually challenge the hold Microsoft has in the market with Windows and its Office business software.

The new versions of both Office and Windows — the company’s cash cows — have been delayed. And Microsoft has conceded that its plans to compete and expand into new businesses will be extremely costly.

Microsoft’s share price has essentially been stagnant for years.

Ballmer insisted Thursday the company is ready to adapt to big changes in the industry, pointing to several initiatives under way to offer more Web-based software and services.

While Microsoft has made online efforts a top future priority, for now Windows and Office remain the company’s main profit sources, and any further delays in either were at the forefront of people’s minds Thursday.

Kevin Johnson, co-president of the Microsoft division that includes Windows, said the company appears to be on track to ship the new version of Windows to businesses in November and consumers in January. But he made clear the company would not hesitate to again delay Windows Vista, which is already years overdue, if further problems crop up.

“We will ship Windows Vista when the product is ready,” he said. “Product quality is job one.”

Microsoft shares fell 50 cents or more than 2 percent to close at $23.87 in trading Thursday on the Nasdaq Stock Market after the words of caution made investors jittery.