The delightfully understated CEO of Microsoft, Steve “there is a kind of hush” Ballmer has admitted that his outfit has one or two problems dealing with China.
He is less optimistic about making huge wodges of cash out of the People’s Republic than India or Indonesia because of the country’s lack of progress in stamping out software piracy.
While India was not perfect when it came to stamping on software pirates, it was “far, far better” than China.
Quietly interviewed in Hanoi, Vietnam by Business Week, Ballmer said that China was a less interesting market than India or Indonesia.
Ballmer’s comments have been seen as a part of the growing dismay among US companies toward operating in the world’s third largest economy.
Google has already pulled out of the mainland to avoid censorship rules, and the American Chamber of Commerce in Beijing said last month its members face an increasingly difficult regulatory environment.
However, the Chinese say that they have implemented more than 1,000 measures related to the protection of intellectual property and the government will continue such efforts.
But lack of progress in protecting intellectual property has led China, which may overtake the US as the world’s biggest personal-computer market in a year, to generate less revenue for Microsoft than India and South Korea, Ballmer said.
To be fair to the Chinese, the piracy rate in the country fell last year. However eight out of 10 bits of software is hotter than a night of passion in a sauna on the surface of the Sun.
Ballmer said that the billions of dollars in lost revenue from piracy in China outweigh the possible benefits of expanding in the country through acquisitions.
If he wrote a cheque for Baidu, China’s biggest Internet search-engine operator, his bottom line would be boosted by only one percent.
The only thing that redeems the Chinese market is that it buys a lot of PCs. The other redeeming factor is it pays for the software that gets used on those PCs.
However, there is no software market, he said.
Ballmer said he sees signs of improvement. Microsoft last month won a decision from a Shanghai court against a Chinese insurance company. The victory followed a court ruling in the eastern city of Suzhou last year sentencing four people to prison for distributing pirated Microsoft software.