October 11, 2007 2:05 PM PDT

Ballmer: Microsoft's behind Google in ads, search

ORLANDO, Fla.--Microsoft Chief Executive Steve Ballmer says the software giant has a long way to go to compete with Google, when it comes to search and advertising.

Microsoft is attempting to break into online advertising, but Ballmer admitted at the Gartner Symposium/ITxpo here Wednesday that Microsoft is still an "aspirant" in the search and advertising fields.

"In world search and advertising, Google is the leader; we're an aspirant," Ballmer said. "We have a lot of work to do in search and advertising."

Microsoft acquired digital-advertising company Aquantive in May, and it has been in the process of investing $2 billion in its own online-advertising platform.

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Video: Microsoft's post-Gates plan
Steve Ballmer talks about filling the gap and sharing the leadership role after Chairman Bill Gates transitions away from his day-to-day duties next year.

Ballmer said it is "expensive to do an advertising platform," but he insisted that Microsoft's platform, Microsoft Digital Advertising Solutions, is viable.

"Our advertising system works," Ballmer said. "When we have something there, we'll show you."

The Microsoft chief said the company had evolved from a desktop software enterprise to a business that had "broadened" to include advertising and online services, as well as being an entertainment and mobile-device company.

Ballmer added that Microsoft's "software model is under attack...We need to take control back."

Aquantive itself still needs to use an external advertising agency as consultants, Ballmer admitted. "(Aquantive has) learned a lot from having an advertising agency feeding back," the chief executive said.

Gartner analyst David Smith said Microsoft was "clearly going after the online-advertising market, and advertising is Google's core market."

Smith said the slowing of the software industry's growth "is a challenge to Microsoft," hence its need to diversify into other sectors of the IT industry.

"Open source is putting a lot of pressure on pure-software companies," Smith said. "Microsoft doesn't have presence in other business--it needs pressure in the advertising market."

Tom Espiner of ZDNet UK reported from Orlando, Fla.

See more CNET content tagged:
Steve Ballmer, David Smith, aQuantive Inc., advertising agency, Orlando

13 comments

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Yea it works...
...But not as good as Google ;)
Posted by gsmiller88 (624 comments )
Reply Link Flag
or Yahoo, or Baidu
MS search is a solid 4th in the world.

But after using it for a while, I'm surprised it's ranked that high.
Posted by rcrusoe (1305 comments )
Link Flag
Face it, Monkey-boy
He always talks a tough fight, but is all bark. You can't have
confidence in anything Ballmer says. What a boob. Hey, Ballmer!
Your kids still forbidden to have anything but Zunes in their
household? They must feel like the school morons, with the 'Softie
community disappearing once they step outside...
Posted by there can be only one (19 comments )
Reply Link Flag
Doesn't have a clue
This statement really show how out of touch he is.

'Ballmer added that Microsoft's "software model is under
attack...We need to take control back."'

They don't need to 'take control back' (they can't) they need to
adapt (they won't under Ballmer)
Posted by dscottbuch (14 comments )
Reply Link Flag
Ballmers time is up
Admittedly his engaging speeches are always good for a laugh. Though, I doubt he is aware its not always his jokes the audience are laughing about.

He palavers in public of him power sharing with others in a Microsoft future after Bill Gates.

What we are seeing is a corporate dinosaur in action ignoring the subtle signs that his time is up.
His enemies in his own company are are sharpening their knives and closing ranks, and Stevie does not even know it yet.

Let him dream on, happily 'squirting' songs on his Zune against an ignorant audience.

One thing is sure, though: The knives are out!

Ian Fielders
Posted by jtjt145 (245 comments )
Reply Link Flag
It's true
He just talks and blows some smoke about Microsoft catching up and still being competitive, but the truth is they've fallen behind and are falling even more behind and have no real plans to save themselves. Sad I suppose, except they deserve it. Linspire looks good, and Apple is in one of the best positions it's ever been in. Vista is junk and so are the Zunes. The only real thing they have going is MS Office and the Xbox, which even then the Wii is outselling them.
Posted by coryschulz (326 comments )
Link Flag
Ballmer could be onto something BIG..
actually no he isn't. I'm only kidding.

But its funny that he talks about Windows as still being
Microsoft's core product, when they haven't really paid much
attention to it in the last five years.

Yes, five years is a very long time for a core product to be
produced and you would expect it to be nothing short of
AMAZING, but instead its just a repackaged version of XP which
is, all it really is.

Does anybody no when Windows Singularity is coming out? Its
supposed to be all the buzz..
Posted by ServedUp (413 comments )
Reply Link Flag
Singularity!
I've watched all of the videos about this on MSDN Channel 9, but they haven't released anything recent on it. I'm sure they have a GUI and and going by now and a whole bunch of other things. This entirely is MS's next OS. I wish they'd talk about it more. If they were smart they'd pump tons of $$ into this.
Posted by coryschulz (326 comments )
Link Flag
Clear example of MS problems
Instead of listening to the mom's problems with Vista and trying to
understand the problem, Steve Ballmer was *trying* to show wit.

He just comes off as an arrogant jackass that doesn't listen to or
care about his customers.
Posted by m.meister (278 comments )
Reply Link Flag
NEWS: Ballmer Finds His Face Using His Own Hands !
I knew we were in the presence of a genius when he did his disco sieg heiling routine years ago. But this interview really cements his legend.
Posted by Sumatra-Bosch (526 comments )
Reply Link Flag
evolved from a desktop software enterprise?
Really? How much money has MS made from everything they do except Windows and Office? So far, IMO, MS is still a "two trick pony".

A ridiculously profitable two trick pony, for sure. But one that has yet to prove they can make money on a level playing field.
Posted by rcrusoe (1305 comments )
Reply Link Flag
Why doesn't MS...
... just buy Google?? :)
Posted by Jim Harmon (329 comments )
Reply Link Flag
 

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