Why start your Asian tour here in Vietnam, which has one of the worst software-piracy rates in the world?
It's a place we want and need to see improvements in IP [intellectual property] protection. China and Vietnam are in the most need of improvement in the IP protection area. India is much better, Indonesia is much better.
With the PC market developing rapidly in Vietnam—the young population, the number of students graduating—we see a lot of opportunities. We are trying to stimulate use of our software.
What excites you about Asia now?
Two things make a country an interesting place: One, they buy a lot of personal computers; and two, they pay for the software that gets used in those PCs. India is exciting to us. Indonesia is exciting to us.
China is in a class by itself: There is no software market to speak off. China is a lot less interesting market to us than India or Indonesia.
If you look at the numbers today, how we do in China vs. the U.S., we do about 10 times better in the U.S. per PC sold. Maybe 20 times. We do seven times better in India. China can't get a lot worse. We haven't given up on China, but from a Microsoft (MSFT) perspective, we do more business in India, we do more business in Korea.
What percentage of Microsoft's $60 billion revenue comes from Asia, excluding Japan?
Just three percent?
How big is the PC market in these countries? It's a third of the world's computers, maybe 25 percent—and yet maybe 3 percent of our revenue. IP protection is critical, particularly in China.
Could Microsoft's online business in Asia help, especially given the recent setbacks for Google in China?
The market leader for search in China is Baidu (BIDU), which has total revenue of only $400 million or $500 million. If we owned Baidu, it would account for 1 or 1.5 percent of our revenue. I don't think there's a solution that will be in search. I think we will also have to be successful with our business customers, which means improved IP protection. There is just no substitute for that.
Do you see any signs of progress? Microsoft has won some high-profile court decisions in China recently.
I am encouraged by that, it's a good start. I hope it sets a trend. I want to be optimistic about China...[however] the level of protection for IP is not very high. We keep working inside China, but we see better opportunities in other countries.