Ballmer made his comments at a conference in Oslo, Norway, where he announced the formation of new research and development centers for business-oriented search tools. Microsoft recently spent $1.2 billion to purchase Fast Search and Transfer ASA, a Norwegian company that will form the core of the new venture.

Ballmer is on the first stop of a European tour that will also take him to Denmark, Britain, France and Portugal.

Provocative Comments

The announcement of the formation of a new business search center was overshadowed, however, by Ballmer's sideline comments about the U.S. financial crisis and its potential impact on Microsoft.

"Financial issues are going to affect both business spending and consumer spending, and particularly ... spending by the financial-services industry," Ballmer said. "We have a lot of business with the corporate sector as well as with the consumer sector, and whatever happens economically will certainly effect itself on Microsoft. I think one has to anticipate that no company is immune to these issues."

Ballmer pointed out that large chunks of Microsoft's business are "safe," in the sense that there is little chance that revenues would sink to zero. On the other hand, he said, overall weakness in the economy is as much a problem for Microsoft as any other business.

"When businesses have less money -- they can borrow less money, they can spend less money -- that can't be good," Ballmer argued. "When consumers feel the economic pinch, house prices come down. That can't be good."

Ballmer's comments were echoed by Microsoft's general counsel, Brad Smith, who issued a statement following Monday's steep market decline:

"Microsoft strongly urges members of the U.S. House of Representatives to reconsider and to support legislation that will re-instill confidence and stability in the financial markets. This legislation is vitally important to the health and preservation of jobs in all sectors of the economy of Washington state and the nation, and we urge the Congress to act swiftly."

Storm Warning for Investors?

Before leaving the U.S., Ballmer's outlook on the crisis was generally more optimistic. He told an audience gathered for the Churchill Club's annual dinner that Microsoft would be able to ride out a drop in the U.S. economy.

Among other factors, Ballmer noted that Microsoft's software business is global, which limits the impact of economic troubles in the U.S. In addition, he said, the consumer software business has not been affected as greatly as the business sector.

But Ballmer's assessment during his talk in Oslo was gloomier, and his concerns were not well received by European markets. According to wire reports, shares of German software maker SAP AG fell more than two percent in heavy trading on the German DAX index.

Despite the economic turmoil, analysts expect Microsoft to report a strong revenue increase -- up to eight percent -- in its report for the first fiscal quarter, which ended last month.