Source:InformationWeek On March 22, four days after returning from negotiations with the European Union in Brussels, and two days before the EU's ruling against Microsoft, CEO Steve Ballmer sat down for an interview with InformationWeek editors at Microsoft's Redmond, Wash., campus. Following are some excerpts, which have been lightly edited for clarity and brevity. InformationWeek: Can you tell us what the sticking point was over in Europe? Ballmer: We and the commission agreed that we were able to, in our settlement proposals, substantively resolve the concrete issues that the commission had, but the commission was interested in getting something more formulaic in terms of guidance for the future. In the U.S., that's not the framework. In the framework here, there's not a formula that makes perfect sense. What was agreed to in the Consent Decree was a set of disclosures, obligations, and responsibilities, in addition to some other things, to try to ensure that there's both innovation and competition. And there was a set of guidelines articulated by the U.S. Court of Appeals in terms of the reasonableness of additional capabilities that we innovate and integrate into Windows, the reasonableness that the value they bring to some customers outweighs in some sense whatever impact they might have on competitors. We tried to speak to some of the same points in our settlement proposals, but the commissioner seemed to want something more concrete, more formulaic, and we weren't able to do that, even though what we offered in settlement goes well beyond what they'll ask for in remedy this week. ..... InformationWeek: What can you tell us about when to expect Longhorn? Ballmer: We set ourselves a set of bold objectives for Longhorn. We went through the initial phase of trying to get feedback on that, being very bold, not crazy, but very bold. We got a lot of great feedback and we learned two things through that process: one, we have more in our initial Longhorn conceptualization than we probably even need to get the breakthrough result we'd want in the market. That's good news. And No. 2, we've probably got more work than we wanted to get Longhorn done on the kind of reasonable schedule we had in mind when we first started talking about Longhorn. So I think the key process which we've been going through is how do we make sure that we take advantage of this situation to cut back a little bit on the boldness--and still be viewed as a big, important, bold release--and get done on a more short-term time horizon. And I think we've made some pretty good progress on that internally; there's still some work that needs to get done. And the Longhorn release that comes out will probably still be a little bit later than I had hoped initially. Not as late as [it would be with] some of the all-singing, all-dancing stuff, but still the most important, significant release we've ever done.