Microsoft details survival plans

Software giant Microsoft held a meeting yesterday during which it discussed how it plans to offset falling revenues attributed to a drop in PC sales caused by the financial slowdown.

In January, the firm announced that it would be looking to make cost savings of about $1.5 billion, and suggested that job cuts might also be on the agenda. However, it seems that Microsoft has had a change of heart, and will try to make more of what it has, rather than count the cost of what it can no longer rely on, such as strong PC sales.

High on the software giant's agenda are low-cost netbooks, which have previously been seen as something of a non-market for the firm. Steve Ballmer told attendees at an analysts meeting that rather than cut costs - he quoted a figure of $2 billion Microsoft would instead work clever to reignite sales in this area in particular.

"We will have high market share on netbooks," he said, detailing plans to launch a cut down version of Windows 7 pitched firmly at the market, that will limit access to applications.

Microsoft will also seek to strengthen its position against Google in the online and ad-serving, market. Ballmer said that the company would continue to investigate ways of working with Yahoo in this area, despite repeated rejections.

"We are up against incredible odds," he said, "I'm hoping that's a reasonable conversation to have with new management at Yahoo."