Mr. Surround-Sound

Steve Ballmer is a Ford guy. Period. His father worked for the Ford Motor Co. in Detroit for 30 years, and if Fords were good enough for Dad, then they are just fine for Steve. Still, even a Lincoln Continental seems an unlikely car choice for a man worth $14 billion--give or take a couple of million--but that's Ballmer. His loyalty is limitless.

It is a trait valued above all others by Microsoft chairman Bill Gates, Ballmer's boss and close friend. And Gates rewarded that unswerving loyalty last week: he appointed Ballmer, 42, formerly Microsoft's chief sales guy, as president and heir apparent.

It's not a reward for being a suck-up. Ballmer operates at a decibel level bordering on OSHA's mandatory ear-protection threshold, a one-man surround-sound. He and Gates, who became fast friends in 1973 during their freshman year at Harvard, have always enjoyed what they refer to as a "high bandwidth" relationship; it means they can scream at each other but are still able to listen and respond. "We fairly well anticipate what the other guy is thinking, and can finish each other's sentences," says Ballmer of his 25-year relationship with Gates. "That doesn't mean we always agree, but knowing how the other one is likely to respond helps us navigate most problems." Conflicts? Ballmer says they've seen them all. "Personnel changes? Major strategy changes? Loss of major customers? Reorganizations? Been there, done that."

The appointment of a warrior like Ballmer seems significant in light of Microsoft's ongoing battle with the Justice Department. The software giant, which controls some 85% of the market for computer operating systems, is facing a federal antitrust lawsuit focusing on its business practices. Ballmer will have been president seven weeks when the suit goes to trial in September. Gary Reback, the lawyer whose crusade is to break up Microsoft, contends the appointment reveals the company's arrogance in the face of the investigation. "Steve Ballmer is the most aggressive of the Microsoft management team, and based on his appointment, I would infer that there is not going to be any change in Microsoft's aggressive stance toward the Justice Department," says Reback.

Ballmer will have plenty of other matters on his screen, however. Personal computer sales are on a downward trend, and the home and small-office/home-office markets, both hailed as the next wave in computing, are stagnant. In addition, that wild and wacky Internet, with its open standards, could potentially topple Microsoft's apple cart, eliminating the need for a Microsoft OS on every desktop.

In light of these market trends, Microsoft is shifting its development focus to a new breed of device that blends the power of a PC with the ease of use and gee-whiz factor of a consumer electronics gadget. Gates, in fact, says the executive changes will allow him to spend more time with his nerdy brethren, working on "architectural breakthroughs" for such devices, including TV set-top boxes, smart phones and tablet computers.

1. McCain's Foreign Policy Frustration
2. Banksy: An Artist Unmasked
3. LeBron's Gold Guarantee
4. Berlin Awaits the 'Next JFK'
5. Hasbro's Legal War On Scrabulous
6. When Jellyfish Attack
7. Israel's Debate Over an Iran Strike
8. A New Cold War in the Caribbean?
9. Goodbye to France's 35-Hour Week
10. Woman Kills Self Before Foreclosure