June 21, 2008 12:41 PM PDT

Ballmer to Google: You're a one-hit wonder

Steve Ballmer must be on crack. Or something. In a fascinating interview with the Financial Times, Ballmer has the cheek to call Google a one-trick pony (this from the company that has only managed two break-out successes so far), can't seem to come to grips with the fact that he hasn't budged his stock price in eight years, and takes solace in the fact that the company only has "one way to go, and it's up, baby, up, up, up, up, up!"

Please pass the vial, Ballmer.

One place where he comes down to earth is in his admission that he hasn't figured out how to compete with open source:

I've got to tell you, in every - other than the battle with Open Source, every other competitor, I love being able to come into a room and saying we're better and we're cheaper. We're going to try to say we're better and we're cheaper basically.

In the case of Linux vs. Windows, anyway, Microsoft is neither better nor cheaper. In its other products, too, it's losing that argument.

But it's really in deriding Google that Ballmer looks ridiculous. When asked about Google, he opines:

I mean, come on. They have one product. It's been the same for five years - and they have Gmail now, but they have one product that makes all their money, and it hasn't changed in five years.

I mean, they have a gestalt, but gestalt is gestalt. Let's talk about the reality. The reality is one product makes 98 percent of all of their money, search.

Pot, meet kettle. As the Wall Street Journal noted in response to this Ballmer comment, "The definition of death, in corporate America, is believing you don't have any competition. The definition of being in a coma may be underestimating that competition." Ballmer even said that Microsoft has only had two hits - Office and Windows - in the interview.

It is true that Google has had one big hit - search - to date. But this isn't an argument for Microsoft to make and then rest on its laurels. Bill Gates can riff on how great Microsoft is as an executor, but it has been at the Internet for a decade now with nothing to show for it.

Microsoft is still a powerful company. But if it continues to fritter away its power on dead-ends and lame products it is going to find that a decade of milking Windows and Office to the detriment of its future won't continue to hold water on Wall Street.

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Add a Comment (Log in or register) 30 comments (Showing first 20 comments)
by Whys333 June 21, 2008 8:04 AM PDT
Ballmer is essentially asking, "where's the forest?" While at the same time, Google keeps planting saplings all around him. Not surprising given his complete lack of vision.

At some point, perhaps not too far into the future, all of Google's many "test" products will achieve a critical mass, be roled into a single service, and could look a lot like a linux thin client running a Google Internet Operating System. The saplings are rapidly growing all around, and Ballmer askings, "where's the forest?"
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by Tui Pohutukawa June 21, 2008 8:11 AM PDT
Remember that CNET interview with Ballmer, when he couldn't finish a sentence without making snorting noises? It's not crack he's on, it's coke.
Reply to this comment
by exmsft June 21, 2008 8:13 AM PDT
Steve has completely lost control of Microsoft, and reality. It's sad, actually. Microsoft needs an injection of new leadership from within that is creative, financially responsible, emotionally stable, and not beholden to themselves. Instead of investing in much needed new products and technologies, Steve flushed huge amounts of cash out in dividends. Which is great. For him, Bill, several other execs, and key institutional funds. But does NOTHING for the company. Vista was a train-wreck for one reason. It was horribly managed. From the tippy-top down. No other reason.

But hey, Steve can go out and make completely illogical rants to magazines... that's fine. He just needs to have others be able to point out the fallacies in his statements as you have just done, Matt. Good article.
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by LJim13 June 21, 2008 8:53 AM PDT
I believe Steve Ballmer's days are numbered. Under his tenure MS has become one of the all time 'Me Too' corporations - frantically, erratically chasing every new fad - never really doing a comprehensive (much less superior) job of it. The future? Even with Ballmer at the helm they are exceedingly well funded - and not to be ignored. But, if they ever want to recapture the magic-of-95, they will need a complete revamp of the top 2-3 layers of outdated, but bureaucratically entrenched leadership.
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by LJim13 June 21, 2008 8:55 AM PDT
I believe Steve Ballmer's days are numbered. Under his tenure MS has become one of the all time 'Me Too' corporations - frantically, erratically chasing every new fad - never really doing a comprehensive (much less superior) job of it. The future? Even with Ballmer at the helm they are exceedingly well funded - and not to be ignored. But, if they ever want to recapture the magic-of-95, they will need a complete revamp of the top 2-3 layers of outdated, but bureaucratically entrenched leadership.
Reply to this comment
by Shuelin June 21, 2008 1:19 PM PDT
Yeah, he is definitely on crack.

http://thegooglehouse.blogspot.com
Reply to this comment
by Shuelin June 21, 2008 1:20 PM PDT
Yeah, he is definitely on crack.

http://thegooglehouse.blogspot.com
Reply to this comment
by jiri_novak June 21, 2008 1:46 PM PDT
I'm sorry but I agree with Steve " mean, come on. They have one product.". Before you blindly respond to my post please look at where GOOGLE makes 98% of their revenue. This is far from being no-risk business. Rebember Yahoo few years back and how they got hit because of their business model? GMAIL makes no money, GOOGLE TALK makes no money, ....

Yes, microsoft is big and evel and .... we all know that Windows VISTA is bad and Linux rocks and bla bla bla we all read it over and over, but they are really pushing their business model different directions. From known operating system, ms office to ... Car system SYNC, XBOX, ZUNE, PBX ... some of them are great, some of them good, some of them suck. The point is they are going many different directions and really try to diversify their revenue stream.

From stock owner view, I see MS stock much more stable than google.
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by MrSviess June 21, 2008 1:48 PM PDT
Ah ha ha ha ha, remember a short time ago his comments on the iphone and the zune?
http://www.youtube.com/watch?v=C5oGaZIKYvo
Well some say M$ needs new leadership, I think Gates bowing out and supportively leaving him in charge indicates that this ship has never had good leadership and is built poorly from the ground up. As they slide they may try to break it up but I don't see much but the office team being valuable to anyone else, Word even though a bloated behemoth is still the defacto and runs well enough (better on someone else's OS) to best the competition for a good while. However, once the tipping point away from M$ dominated IT closets occurs and that won't be long they have very little in terms of innovative technology for anyone to buy and that includes the been there multitouch interface.
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by sheebz June 21, 2008 2:04 PM PDT
Matt,

You may want to do some research before you write your articles. Just off the top of my head it seems like MS has a lot of hits. For example, just off the top of my head... MS-BASIC, MS-DOS, Office, Windows, .Net Framework. But hey, why look up the facts when you can make up an outrageous headline like someone is on crack?
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by sheebz June 21, 2008 2:05 PM PDT
Matt,

You may want to do some research before you write your articles. Just off the top of my head it seems like MS has a lot of hits. For example, just off the top of my head... MS-BASIC, MS-DOS, Office, Windows, .Net Framework. But hey, why look up the facts when you can make up an outrageous headline like someone is on crack?
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by GeneOdyssey June 21, 2008 2:12 PM PDT
I'm sick, real sick, of hearing this Linux crap. I wonder why so many PC's in the world use a Windows OS, and why most corporations in the world use MS products. And this is just one of their many streams of revenue.

As far as CNET is concerned, Microsoft never does anything right. Never.
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by RJena June 21, 2008 3:15 PM PDT
Yes, it is true that Google has one product...but slowly that product is going to fund other inovations to make life easier. Micorosft has two products...but stuck on them...Not much is coming out of ther Research Labs worth excitement. In their effort to bury IBM, Micorosft lost their way and now trying to compete with Oracle and SAP. The only good thing is the Database Server. Even in that department, may be 3 years out, Google could win as they are learning how to handle massive data while Microsoft is thinking about it.
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by expatincebu June 21, 2008 3:59 PM PDT
Windows and Office are only on top in the corporate world because most corporate managers are total idiot "me too" lemmings. In the corporate world, the pond scum rises to the top. The easiest way to spot it is that framed MBA on the wall. Basically the flag of the person who can't cut it in a real job.

For 99.9% of computing needs open source gives you everything you need. It is cheaper and more reliable. Why people continue to buy MS Office is beyond me, other than the old maxim about a fool and his money.
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by moeglittz June 21, 2008 4:39 PM PDT
Ballmer's main problem is that Microsoft has no real Web Strategy. I mean its one thing to have a range of great Web Services such as Internet Explorer, MSN, Live Messenger, Hotmail, Live Search & Microsoft Virtual Earth. But apart from creating Web Advertising revenues across these key Web Services, can Microsoft find an alternative Business Model for their future Web Strategy, or even find a brilliant CEO to run it.
Considering the Web is only 10 years old, it is hard to know which Businessmen out there understands current Web Strategy and what it takes to create a new Web Business Model that does rely entirely on Web Advertising.
I truly believe that Microsoft should look towards creating a future Web Strategy that copies the huge success that they had in developing a Desktop O/S - by creating the perfect Web O/S. But to do this, Microsoft would need to integrate Web versions of their popular Windows and Office brands into their current Web Services portfolio, to develop a Microsoft Web O/S Service.
Just as everyone brought into the Microsoft Desktop O/S, the same success can be repeated through a Microsoft Web O/S. But this Microsoft Web O/S Strategy could bring in much more revenues than Web Advertising, which could effectively be integrated into this Web O/S, along with a number of relevant Web O/S Services.
So instead of Microsoft wasting Billions of dollars in trying to purchase Web Companies that are a part of the current Status Quo. Why don't they spend some well earned cash on finding Web Strategists that can help them develop this 'killer' Microsoft Web O/S.
I would be first in line to sign up.
Reply to this comment
by scottdavidlowe June 21, 2008 7:24 PM PDT
Matt - Microsoft has two products that can be defined as successful? For argument's sake, let's assume that you're talking about Windows and Office. To say that you blew it on this one would be a huge understatement. CNet is supposed to be a respectable news outlet, but this kind of reporting brings shame to the whole crew. It's entirely possible that you don't consider Exchange, SQL Server, heck, DOS, SharePoint and some of their other products successes.
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by rhemy123 June 21, 2008 8:04 PM PDT
The funny thing about that comment is that here you have google which does one thing really well and makes a ton of money off of what it does really well. They offer their programs for free and don't expect to make money of the product directly, but instead from the advertising opportunities that arise from those products. A friend once told me that making alot of money has nothing to do with doing what you love to do, but instead has to do with doing what you do really well over and over and over again. Google's got that down, and if the web is the future, google at the moment appears to have it on lockdown.

Meanwhile, microsoft cant seem to cobble together anything worth having. Vista was honestly laughable. I'm a poor person; yet when i saw vista for the first time, I truly felt sorry for microsoft. All those millions and they cant seem to make anything worth buying. They spend more time reacting to their competition and less time successfully executing a vision for the future.

Then again, I cant help to think they have no vision for the future. So many smart people, paid so very well, to do absolutely nothing, except repacking xp every few years.
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by The_Decider June 21, 2008 8:34 PM PDT
MS shills, please read and try to comprehend the article. Ballmer himself says they have 2 successes. IMO, they have one, but they bought nearly everything in Office and have been hell bent on ruining ever since. Windows can not be considered a success. It only got there through deceptive and illegal tactics. Windows is a total mess, a monument to incompetent programming. Find the leaked NT code a few years back for a solid example. Even if you can't follow it(even MS can't) or write code(if you are a MS fan odds are you can't), you can read the comments in the code. Hilarity!!!
Reply to this comment
by akiba_freak June 22, 2008 2:21 AM PDT
In regards to sheebz:
"For example, just off the top of my head... MS-BASIC, MS-DOS, Office, Windows, .Net Framework. But hey, why look up the facts when you can make up an outrageous headline like someone is on crack?"

As a developer, I'd have to say that a development tool is not a profit mechanism, but a marketing tool for the OS. MS-BASIC was used to promote MS-DOS by allowing people to create software for it. The .NET framework is used to promote Windows by allowing people who don't understand how memory works to create software for Windows. The development environments themselves don't have any meaning outside of the OS that they promote.

In regards to scottdavidlowe :
"It's entirely possible that you don't consider Exchange, SQL Server, heck, DOS, SharePoint and some of their other products successes."

I think that it is entirely possible that most people don't consider those examples as successes. As for Exchange, it's basically a standard mail server and most people use the free ones with Linux or some other Unix variant to handle this. As for SQL Server, it got its ass kicked by MySQL. What does Sharepoint do again?

Just my 010'b cents.
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by seilerbird June 23, 2008 7:40 AM PDT
Vista is a train wreck????

They sold 100 million copies in it's first year of existance. The cheapest version goes for $99. I bet there are many other companies that had such a bad train wreck.

I have been using Vista for almost two years and it rocks. It makes Leopard look like the piece of garbage that it is. Overpriced, underpowered and stupid. Linux is such a joke and so are the people who use it.

Windows still has 95% of the desktop market. Microsoft hired 11,000 new people last year. There sure are a lot of jealous people in this world.
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About The Open Road

Matt Asay brings a decade of in-the-trenches open-source business and legal experience to the Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is general manager of the Americas division and vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure.

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