TechWeek: Microsoft Muddies the Waters

But despite the CEO's carefully chosen words, some analysts thought he muddied the picture. "Ballmer did a poor job of communicating realistic expectations about Vista growth," wrote Credit Suisse analyst Jason Maynard. "He suggested that a few sell-side models were too aggressive on this front. Unfortunately, the message came across to many that Ballmer was trying to talk down consensus Vista revenue estimates, rather than just a few outliers." Credit Suisse has an investment-banking relationship with Microsoft.

Part of the problem is that Microsoft has a huge number of moving parts. Consider the issue of PC growth. Ballmer indicated that Vista will not grow faster than PC shipments grow, in part because the fastest-growing markets -- the so-called BRIC countries of Brazil, Russia, India and China -- are also the areas most prone to software piracy.

On the other hand, Vista and Office are harder to pirate than previous versions of the software, and Ballmer figures that could help revenue growth. How much it will help? It's too soon to know, he says.

It's not surprising that investors are engaging in the kind of tea-leaf-reading that used to follow pronouncements from the Kremlin. "Ballmer did say that he didn't think that there was a big disconnect between Street estimates and what company management views as reasonable," wrote Sanford Bernstein analyst Charles Di Bona.

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