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Ballmer speaks on Internet advertising, the economy, mobile phones and more

It's odd to hear the Microsoft juggernaut describe itself as the David to anyone's Goliath. Yet that is exactly what Microsoft CEO Steve Ballmer said to BBC News.

Ballmer was interviewed by BBC News and talked openly about Microsoft, the economy, and the firms search goals. Speaking on internet advertising Ballmer said, "Do I wish we'd started the investment in search a few years earlier? Yes. We may be the David up against Goliath but we're working on it."

According to Ballmer, the big concern for Microsoft is the lead that Google has built in the online advertising market. Microsoft still plans to challenge Google in the advertising and search arenas, even after the much ballyhooed and publicized failed talks of purchasing Yahoo.

Ballmer sounded more like the Microsoft most are used to when speaking about rival Smartphone operating systems. He stated, "You've got to remember Android is version one....and it looks like version one. They've got one handset maker, we've got 55. They're available through one operator, we've got 175."

Ballmer maintains that Microsoft will hold other mobile operating systems at bay and remarked that open-source is not the most attractive solution to phone manufacturers. The open source operating system Ballmer was referring to was Google's recently released Android OS.

Google has said that it went open source with its OS to allow phone makers and mobile carriers to change Android to their needs. Google is much more interested in opening new advertising mediums on Internet enabled mobile phones than charging phone makers for using Android.

When asked about the maligned Vista operating system Ballmer said, "With their Windows PCs people have what I would call a love/hate relationship. There are things they'd like us to do better but if you asked them if they loved what they're able to do with their PC, I think they'd say 'Yes'."

Ballmer says that Vista has been Microsoft's most popular operating system to date.

Speaking about the economy in the U.S., Ballmer stated, "I don't think there's any confusion in Washington that they need to make smart choices to help the US economy." Ballmer warned that the poor economy could impact technology spending.

Many of the largest computer makers including Dell have already announced that the slow economy led to the inability to meet Wall Street profit projections. HP still maintains that it will be able to hit projections for the quarter. Retail stalwart Best Buy was also unable to meet projections for the quarter. When the computer market that relies on Windows products for the vast majority of their computers sees slowing sales, it makes sense that Microsoft would see sales lag as well.

One could see slowing sales of Microsoft's Vista operating system on the back of slowing overall PC sales as a reason Microsoft recently relaxed the requirements for using Windows XP on netbook computers. The netbook segment is surging thanks to the lower average cost for a netbook compared to a traditional notebook. Many netbook computers run Windows XP and expanding the amount of systems that can use XP would be a benefit to Microsoft in a sluggish economy.

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RE: Search engine...
By arazok on 10/2/2008 3:31:17 PM , Rating: 4
10 years ago I would have said that nobody would ever displace Yahoo as the search engine of choice.

There is nothing tying users to Google. The minute somebody comes up with a way to present better search results, users will abandon them.

RE: Search engine...
By Tamale on 10/2/2008 4:32:25 PM , Rating: 2
I'm not too sure about that..

google got popular right when the internet's popularity also skyrocketed out of geekdom and into the common man's living room.

"googling" is totally synonymous with searching on the internet, and even a slightly more accurate search engine, however impossible that might be to create isn't going to change that anytime soon in my opinion.

RE: Search engine...
By omnicronx on 10/2/2008 4:56:32 PM , Rating: 4
Google got popular when people realized that their searching technique was better, and it resulted in better searches. PageRank is pretty ingenious if you ask me, it is the backbone of Google, and chances are it will be a while before someone thinks of a better idea. It is little known, but the main technique used behind Google searching dates back to the 1950's, and weirdly enough, the actual patent on the technology is owned by Stanford university(although google has exclusive rights which they bought in exchange for shares) and took quite a few years to develop.

Neither Yahoo or Microsoft have come up with a system that truly compares to pagerank, and the problem is even if they do, Webmasters have put so much into raising their Google PageRank, that it is going to be very hard for Google to be overtaken.

RE: Search engine...
By Oregonian2 on 10/2/2008 5:36:06 PM , Rating: 2
Must be newer stuff. Patents from the 50's would have expired by now. Even with brand new patents, they only last 20 years from the time it's granted (or less if payments aren't made periodically).

RE: Search engine...
By JustTom on 10/3/2008 12:11:14 PM , Rating: 2
The actual patent is from 2001 and is owned by Stanford U.

RE: Search engine...
By Solandri on 10/2/2008 5:36:14 PM , Rating: 2
10 years ago, Yahoo was an index/portal site. You went to AltaVista for searches. If I want a portal site, Yahoo is still the first one that comes to mind. DEC never really put as much effort into AltaVista as it deserved (I heard it only indexed like 3% of the net), so Google really capitalized on an underserviced market at the time.

Microsoft has never been very good at Internet stuff. Their past successes have mostly involved seeing what other people are doing, and leveraging their dominance of the OS to beat their competitors:

- Excel (Lotus 123) and Word (WordPerfect), both of which missed the transition from DOS to WinAPI.
- transparent file compression (Stacker) which they simply added to the OS when Stacker refused to sell.
- IE (Netscape) which they bundled for free so people would stop downloading Netscape.
- DirectX (3Dfx's Glide and OpenGL) where I actually think they did the graphics world a service by supplanting two contentious and poorly updated standards, even if it is a pain to code in.

The notable exception is Photoshop, where I think Adobe managed to hold out because initially the bulk of Photoshop users used it on Macs.

When it comes to stuff independent of the OS, they've fared poorly. They totally missed the boat when the Internet first became mainstream. Gates thought the CompuServe/AOL model of glorified proprietary dialup BBSes would win out, and so refused to put a TCP/IP stack (necessary to access the Internet) into Windows until Win95. That was a full year after I started seeing URLs being advertised on billboards and TV (granted I was in Boston at the time). MSN actually started out as a dialup competitor to AOL, before they put it on the Internet at large. When they needed a web-based mail service, they didn't even bother trying to make one, they just went out and bought the already-successful Hotmail.

They make some good products (their Outlook/Exchange combo for business completely owns anything else I've tried). But their poor Internet efforts IMHO support the claim that if they didn't dominate the OS market, they'd just be a mediocre software company.

RE: Search engine...
By PrinceGaz on 10/2/2008 8:50:32 PM , Rating: 2
It could be argued that MS abused their market dominance with the introduction of Windows when it came to how both WordPerfect and Lotus 123 fared. WP for Windows was held back by lack of access to Windows API leading to early stability issues (WP for Windows 5.1 was a nightmare, unlike WP for DOS 5.1 which was rock-solid). 123 never really made much of an impact on Windows, they betted on the wrong team (OS/2) and lost, which is a shame as at the time OS/2 was the superior operating-system.

I don't think transparent file-compression really mattered.

IE definitely did matter as it all but destroyed Netscape and other browsers.

DirectX or more accurately Direct3D was important as along with OpenGL, it helped replace the numerous proprietary APIs then in existence. It's worth noting that OpenGL is still more important than Direct3D as OpenGL is central to the entire professional design market. Direct3D may have won for most games, but OpenGL is where all the real work is done. It was good that they both came into dominance as the situation before could have killed PC gaming- where games had to support multiple incompatible graphics APIs like Rendition, PowerVR, Glide (sometimes more than one version), Virge, Rage, Number Nine, etc. Every GPU manufacturer having their own API was madness, and I for one am glad that 3dfx went bust so as to eliminate Glide.

Far from supplanting Glide and OpenGL, DirectX (Direct3D) led to the removal of Glide, but has allowed OpenGL to gain in strength to a dominant position outside of gaming.

MS won't throw the towel in, but they're so far behind Google in the online area that they have little hope of coming back short of a miracle.

MS's strength is still Windows and everything that runs on it, which means they have a vulnerable foundation. Windows won't be dominant forever, and once it starts to falter, everything else MS has built on top of it will collapse.

"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes
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