Microsoft CEO 'very surprised' by Oracle-Sun deal

MOSCOW (Reuters) - Microsoft's MSFT.O chief executive said on Monday he was 'very surprised' by Oracle's ORCL.O plans to buy Sun Microsystems Inc JAVA.O.

“I just learnt it ... I need to think about it. I am very surprised,” Steve Ballmer told Reuters in Moscow.

Earlier on Monday Oracle unveiled a plan to buy Sun for more than $7 billion (4.8 billion pounds), after the high-end computer server and software maker's talks with IBM IBM.N fell apart.

Microsoft MSFT.O is itself talking to Yahoo Inc YHOO.O on an Internet search advertising partnership which could help it turn around its money-losing online business and challenge rival Google's GOOG.O dominant position.

Ballmer told a news conference in Moscow it was the right time to invest in that business. “We are clearly losing money. We will make money some day. Now it is the right time to invest.”

“I think that advertising will be the most important way for us to make money in the online business, search, in display advertising, and partnership with Facebook is a part of that.”

Last year Microsoft took a $240 million stake in internet social network Facebook, beating out Google and expanding its advertising partnership with the social networking company.

Analysts say the potential deal with Yahoo may help it turn around its online business and challenge Google’s dominant and growing share of the U.S. search market.

Ballmer also said the economic crisis was the right time to invest in innovations, adding Microsoft will spend a total of $9 billion on research and development this year.


He said Microsoft planned to invest 10 billion roubles ($299 million) in projects in Russia in the next three years to support small businesses and promote computer literacy.

The initiatives range from projects to increase computer literacy to the creation of innovation and research facilities, Ballmer said, adding they aimed to help Russia respond to the current economic crisis and build sustainable economic growth.

“We view Russia not only as a market of great strategic importance for Microsoft but also as an important centre for future innovation, entrepreneurship and economic growth ... despite the challenges we face I am extremely optimistic about the long-term future,” Ballmer said.

($1=33.46 roubles)

Editing by Greg Mahlich