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Ballmer's exit interview reveals his influence on Xbox and settling lawsuits

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Steve Ballmer Black and White
Steve Ballmer Black and White

Microsoft CEO Steve Ballmer is preparing to retire from the software giant in the coming months, and ZDNet’s Mary Jo Foley has interviewed Ballmer and a number of current and former Microsoft executives for Fortune magazine to provide what’s expected to be Ballmer’s final press interview as CEO. While there’s no insight from Ballmer on his recent strategic misses with Microsoft's tablets and smartphones, he does reveal that one of his first decisions as CEO was to enter the gaming market. Xbox "was my decision, my accountability" says Ballmer.

The bet on Xbox may have cost Microsoft billions over the years, including $1 billion lost to fix "red ring of death" issues on the Xbox 360. But the console has helped the company stay relevant with consumers, and secured an important part of the living room. Ballmer approved a business plan for Xbox after just one month in his role as CEO. "I’ll make this work — not that I had to drive it — but we had some bumps on the road," explains Ballmer. "And it was important that I stay accountable, stay patient, and stay behind the decision that we made."

As Ballmer was helping build Microsoft’s enterprise businesses during his time as CEO, an important part of the company’s revenue today, he also played a significant role in recovering from the company’s antitrust trial. Ballmer took over from Bill Gates in January, 2000, in the middle of a case against the software giant from the US Department of Justice and 20 states. While Gates was combative, Ballmer wanted to settle antitrust cases that mounted in other countries and class-action lawsuits against Microsoft.

Ballmer dealt with lawsuits as a top priority

"Being the object of a lawsuit, effectively, or a complaint from your government is a very awkward, uncomfortable position to be in," Ballmer says. "It just has all downside. People assume if the government brought a complaint that there's really a problem, and your ability to say we're a good, proper, moral place is tough. It's actually tough, even though you feel that way about yourselves." Ballmer pushed to settle the cases as a top priority, costing the company between $5 billion and $6 billion. Most cases were settled by 2005, leaving Microsoft and Ballmer to recover from such a rough period in the company’s history.

Ballmer reflects on his time as Microsoft CEO and believes the company is more focused today, partly due to the simplicity of 13 years of changes. "We've gone from being a complete leader to a leader and a challenger, both in the same body," admits Ballmer. His successor is expected to be named shortly, and the main challenge the company faces is adapting to its devices and services goals. Microsoft is acquiring Nokia’s phone business, but it’s what the next Microsoft CEO decides to do with future devices that could shape the immediate and long-term future of Microsoft.