Ballmer: Vista needs a bigger marketing budget

Microsoft chief executive Steve Ballmer believes the software giant needs to spend more on marketing in order to sell more copies of Vista, and has hinted that a sizeable increase in its marketing budget is on the horizon.

It has been estimated that over $500m (£250m) has been spent on marketing Vista since its release.

Speaking at a Microsoft strategic update conference in the US on Monday, Ballmer told attendees that the company will have to begin re-engaging consumers in the face of renewed competition.

"We're going to have to invest more than we ever have in consumer excitement," said Ballmer.

The Microsoft chief executive told attendees to expect more to be done to "highlight Windows", and said the task will "require more investment".

According to Ballmer, Windows is the company's biggest growth opportunity, which could, according to an analyst, be because large companies still prefer XP to Vista.

Matthew Oostveen, software analyst at research firm IDC, said that Ballmer's announcement does not come as a great surprise given "the public's reception to Windows Vista was lukewarm at best".

"While the year of Linux on the desktop never eventuated, threats to Microsoft's desktop dominance came from the surge in Apple, which was buoyed by its iPod sales," said Ootsven.

Microsoft's Ballmer also hinted at progress on Vista's successor — Windows 7 — but would not discuss any details at the conference, saying: "I'm not really going to talk about that now, but we're very hard at work on the next version and I'm enthused about what we're doing."

CNET News.com's Ina Fried contributed to this report.