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A CNET Conversation with Steve Ballmer

In the latest installment of our new interview program, Microsoft's CEO talks about the economy, competition with Apple and Google, and, sadly, offers no new details on the rumored Courier tablet.

REDMOND, Wash.--Steve Ballmer is never at a loss for words, but that doesn't mean he always spills the beans.

Such was the case with the top-secret Courier dual-screen tablet that Microsoft is said to be working on.

As part of an interview for our new CNET Conversations program, Microsoft's chief executive said he had nothing to say about the product. "I really don't," he told me and CNET TV colleague Molly Wood. (My sources tell me the project is real and that Courier is one of many prototypes, though that's about all I've managed to learn so far.)

The video of our interview is embedded here. For the full interview in text form, check out the transcript on the CNET Conversations Web page.

Ballmer was not similarly tongue-tied when it came to talking about his optimism for technology, his thoughts on the economy, or his company's competition with Apple and Google.

As for the economy, Ballmer said that things aren't getting worse, but didn't want to go as far as Google CEO Eric Schmidt who recently declared the economy is improving.

"Well, I think any sort of forecast at this stage is probably a little bit premature," Ballmer said. "Thank goodness we haven't fallen off a second cliff, which certainly in some economic times we have, but unemployment rates are still high and growing, so it's a little hard for me to say the worst of the recession is behind us when there's still a lot of families both out of work and more families out of work every day."

He said he still has his fingers crossed. "I don't think things are getting worse, but I don't think they're getting a lot better yet either," Ballmer said. He is due to talk more on this subject in a speech in London on Monday.

As for Google, he acknowledged them as a "genuine competitor" in Microsoft's core businesses of Windows and Office, but said that Google Apps isn't necessarily a stronger product than others such as OpenOffice or StarOffice.

"This one is not any better than the ones that have preceded them," Ballmer said. "I mean, I've not seen anything from Google that makes them look better than the other guys we've competed with...They're better funded. You know, they're making money hand over fist in the search business, so they can afford to (compete). Even if they're not successful, they're well-funded."

Now playing: Watch this: CNET Conversations: Microsoft's Steve Ballmer

And while Apple's advertising may be portraying the company as hipper than Microsoft, Ballmer said Apple's ads largely appeal to the company's existing fans. Microsoft's Windows campaign, he said, is aimed at the rest of the market.

"They've done a very good job of marketing to their 3.5 percent of the market," Ballmer said. "I'm glad we're doing a great job with the other 96.5 percent."

One needs to have a different approach to appeal to the masses, Ballmer said. "They advertise basically to that small niche of people who want their machines. And I don't take it away from them; they make a very good business doing it," he said. "So, we need to have messages that are appropriate to the vast majority of people, and it's fine. There may be 3 percent of people who sort of appreciate their approach."

On the mobile front, Ballmer acknowledged that the situation isn't quite the same, but said he is pleased with the progress Microsoft is making, though he didn't offer any new details on what the company is doing beyond the Windows Mobile 6.5 devices that go on sale this week.

"I think that's going to be a big step forward," he said of the new phones, which Microsoft is pitching as "Windows phones."

"We're just going to keep (coming out with) new releases, new releases, new releases," Ballmer said. "At the end of the day, I think the model of a software company partnering with a lot of handset vendors is powerful. It's powerful relative to what you see from folks like Palm and Blackberry and Apple."

Although Ballmer wouldn't comment on Courier specifically, he did say that the tablet market, which Microsoft pioneered, continues to grow and evolve.

"Oh, there's definitely a market for computers that you can mark on," he said, adding that there would be a number of new designs this fall from PC makers, plus whatever Apple eventually does. "So, I don't see that market going away, and certainly Apple -- I'm sure Apple will bring a unique point of view. They tend to bring unique points of view to things. And yet we've got great people doing great stuff, and let's see what the competition has."