Ballmer: it'll take a while to catch up with Google

 

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By Barry Collins

Posted on 26 Sep 2008 at 09:53

Steve Ballmer has admitted that Microsoft faces an uphill task to catch up with search leader Google - but claims his company is the only one that can do it.

Addressing the Microsoft Venture Capitalist Summit in Silicon Valley, Ballmer admitted that "it's going to take us a while" to catch up with Google, before claiming his company was "unique" in its ability to compete with the search leader.

And the Microsoft chief said there would be no let up in the company's investment in search. "If you take a look at portal, you take a look at communications, those are strong markets for us, they're strong for Yahoo, they're strong for other players across the world, but Google is a force in search," Ballmer said.

"And as I mentioned to some folks this morning, this is one of Google's weaker markets, this country that we sit in [the US]. They're actually much stronger in Europe and some other markets where they tend to have 90% share."

"So, we know we have our work cut out for us, but it turns out we're able to hire great, great talented people in this area. I'm excited about the talent that's available in the market. I'm excited about the opportunity to try to rethink from a business model and user interface standpoint where search is going.

"I told our investors it may cost us 5 to 10% of our pre-taxed profit for several years, but I'm game to do it. I'm excited to go do that if that's what it takes, because I think the opportunity for us, not just for the current market leader, is large."

Mistakes made

Ballmer also revealed that there will be no let up in Microsoft's acquisition spree. "My guess is we'll buy another 20, 25 companies [in this fiscal year]," he said. "The sweet spot for us is under a billion more than over a billion. Companies under a billion are basically usually technology and people. Once you get to a billion, you're buying customer-based and sales force and brand and all of the rest. We tend to like and do better with the former than the latter."

Although Microsoft is often accused of wasting money on acquisitions, Ballmer revealed that he regrets selling - rather than buying - parts of the business. "Almost everything we've ever stopped doing I wish we hadn't," he said. "I mean, I can go through a list of things that we used to do, and I say, gosh, if we had kept doing it, we might have gotten to FU earlier or BAR.

"We had this business we called Sidewalk. It was local entertainment guides. We sold it to City Search. It was all wrong. There was nothing right about the idea, not a thing. Today I wish we hadn't sold it, because I think we would have gotten to local search and doing local search well sooner."