"If we were starting (MSNBC) now, as good an operation as it is, I don't think we would have started it," Ballmer told Reuters during a conference in Lisbon, Portugal. MSNBC is a joint venture with NBC TV and includes an online news site.
Ballmer's lament comes as the entire media industry, and Web publishers in particular, is suffering through a downturn in the advertising market. Scores of online and offline media businesses have been forced to lay off employees or close divisions because of plunging ad revenue. NBC itself folded its Internet operations, a Web portal and media company called NBC Internet, back into corporate operations and shut down its offices in San Francisco.
"Steve (Ballmer) and Microsoft have come to this conclusion after going through several years of failures in establishing popular MSN content sites," said Dwight Davis, vice president at Summit Strategies, a market research and consulting firm.
"The company has had some successes, but by and large, Microsoft's efforts to shift from being a software company into being a creative and innovative content producer fell flat."
MSNBC, an all-news cable station, was launched five years ago as a $420 million joint venture of Microsoft and NBC, a subsidiary of General Electric. The Internet division pairs its news coverage with links to content from other NBC properties.
Microsoft's foray into the media business coincided with early expansion on the Internet. In its initial Net efforts, Microsoft attempted to become an online media force, creating programming on its MSN Web service and developing editorial sites such as city guide Sidewalk.com and online magazine Slate.
But those attempts haven't always returned stellar results. Microsoft sold Sidewalk to Ticketmaster Online-CitySearch, spun off travel site Expedia and has opted to invest in a smattering of companies instead of owning them.
In addition, Microsoft and NBC announced plans in April to merge MSN MoneyCentral and CNBC.com into one, leaner financial news site, trimming staffs at both sites and joining marketing efforts.
As a result of several lukewarm efforts, Microsoft's Ballmer said the company should stay away from starting a company that provided online content--a vastly different path than that of AOL Time Warner. America Online merged with Time Warner earlier this year.