Ballmer: Microsoft to increase 2007 R&D spending

Microsoft Corp. plans to spend US$7.5 billion in research and development in fiscal 2007, a figure that increases the research and development spending analysts and industry-watchers previously expected from the company, Chief Executive Officer Steve Ballmer said Tuesday.

Ballmer made the comments at a luncheon event in Madrid, a spokeswoman for Microsoft's public relations firm confirmed late Tuesday. She added that the latest R&D figure, though higher than one previously given by Ballmer, is in line with predictions from Wall Street analysts.

Earlier this year, Ballmer said that Microsoft would spend $6.2 billion in R&D, but the company did not put any guarantees or caps on that investment.

Ballmer and other executives have said the company is determined to catch up and even surpass rivals Google Inc. and Yahoo Inc. in online advertising revenues. A good chunk of the investment will go into building out Microsoft's online services, branded Windows Live, and content on Microsoft's MSN site, executives have said.

Other recent new product investments for the company have been in the online digital media market. Microsoft has said it will launch a rival to Apple Computer Inc.'s iPod, the Zune media player, in November, teaming it with an online music sales and subscription service called Zune Marketplace. Microsoft also plans to release media player accessories.

Microsoft is scheduled to report its first-quarter earnings for fiscal 2007 on Thursday, Oct. 26. Microsoft's 2007 fiscal year began on July 1, 2006, and ends on June 30, 2007.