Ballmer Gets Grilled on Yahoo, Google and Apple at MIX

A Yahoo acquisition would help Microsoft gain critical mass in the search and search-related advertising business, Ballmer says.

LAS VEGAS-Microsoft CEO Ballmer came to the MIX conference to sit down for a quiet fireside chat and talk about those issues important to developers. Instead, what he got was a complete grilling about Yahoo, Google and Apple.

Guy Kawasaki, a managing director at Garage Technology Ventures and a former Fellow at Apple Computer, moderated the chat, peppering Ballmer with questions about why Microsoft wanted to buy Yahoo.

Ballmer responded that Microsoft was committed to being a very serious player in the world of search and advertising. Advertising on the Internet is big and will be huge in the future, he said, noting that Microsoft was not where it would like to be on that front.

"We could have started going earlier on search and search-related advertising, and Yahoo is important to us in that space as you need critical mass there," Ballmer said, acknowledging that Microsoft was the underdog in the online advertising space.

He said scale was really important in the online advertising business and ads were part of the content on a page, and Google had a bigger share of that at this point. Ballmer also said search was a key application, and he wanted a large percentage of all search transactions to use Microsoft's products and places where its ads were served up.

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If the Yahoo deal did go through, Ballmer said, one thing was clear: There would not be two of everything-not two search engines and not two advertising services.

Asked by Kawasaki if he threw darts at pictures of the Google founders, Ballmer quickly retorted that he did not, but noted that his company did not see Google's presence in the desktop space or in the server and enterprise space.

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"They may aspire to that, but they are just not present there. Google is also an aspirant in the entertainment space," Ballmer said. But the search market, he said, was "all Google, Google, Google, and we are working away, working away, working away at this."

Kawasaki asked Ballmer if he saw Apple as being like a little dog biting at his heels and that he had to kick away every day.

Ballmer said he did not, and while Apple did "a pretty good job, we also do a pretty good job, and at the end of the day, we have a much bigger footprint than Apple does. They will continue to do good work and we will continue to compete with vigor and energy," he said.