According to foreign media reports, Steve Ballmer, CEO of Microsoft, said in an interview yesterday that the US financial crisis is likely to hurt the demand for computer software.
Ballmer said that in view of the number of software purchased by American companies, "it is reasonable to guess that the financial crisis will bring the consequences of damaged demand" and "no one knows exactly what will happen". He said that the company may be cautious when dealing with the current situation. "Anyone who doesn't pay attention to the financial crisis is too reckless."
Ben Bernanke, chairman of the Federal Reserve, said yesterday that the stability of the US financial market is facing a "serious threat" and the growth of software and equipment expenditure of enterprises is likely to slow down. To this end, the federal government put forward a $700 billion rescue plan, aiming at reducing the pressure faced by financial companies and encouraging loans.
The financial crisis has worsened in the past two weeks, but before that, the growth of technology expenditure has slowed down. According to a report released by Forrester Research this month, nearly half of large companies have cut their budgets this year to cope with the economic downturn. Ballmer said that Microsoft is likely to seize this opportunity and "invest more money than other competitors to ensure future development".
Microsoft plans to buy back up to $40 billion in shares and raise dividends to attract investors. In addition, Microsoft also decided to issue the first batch of commercial paper, which may sell up to $6 billion in corporate bonds. Standard & Poor's rated Microsoft AAA, making it the first company to receive the highest rating from Standard & Poor's in ten years, which may help Microsoft attract investors, who are looking for a safe haven in the chaotic situation of the US financial market. Since the subprime mortgage market collapsed at the beginning of last year, the total capital write-downs and credit losses of major financial institutions in the world have reached more than 500 billion US dollars, and the borrowing cost has been rising.
Earlier this month, Lehman Brothers filed for bankruptcy protection, and the federal government allocated as much as $85 billion to save American International Group. US President Bush said yesterday that the rescue plan will help the economy avoid falling into a "long and painful" recession.
The financial crisis has spread to other industries. Today, GE lowered its annual profit forecast for the second time this year, because the financial services market is facing "unprecedented weakness and fluctuation". (