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May 3, 2006 5:40 PM PDT

Gates: Microsoft will keep Google honest

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Microsoft ready to spend--but on what?

May 3, 2006
REDMOND, Wash.--While Google has grabbed an early lead in search and Internet advertising, Microsoft Chairman Bill Gates pledged on Wednesday that his company would "keep them honest."

Speaking to a crowd of MSN's largest advertisers, Gates said that Microsoft would prefer not to be coming from behind.

Bill Gates Bill Gates

"For Microsoft, we always want to be in the lead, making the breakthroughs," Gates said. But, in an onstage interview with ad executives and talk show host Donny Deutsch, Gates conceded that the company has made mistakes, including in some cases picking the wrong people to lead certain efforts.

He also gave credit to his rival, saying Google has "done a great job on search and what they've done with advertising." But, he reiterated his position that search today is still too much of a treasure hunt and promised that better things are in store.

"We will keep them honest, in the sense of being able to do better in a number of areas," Gates said.

Gates and Jay-Z

With its annual MSN Strategic Account Summit, which runs through Thursday, Microsoft is both trying to hone its pitch to advertisers as well as reassure its investors, who have pushed Microsoft shares significantly lower since Microsoft announced plans last week to invest roughly $2 billion more than expected in its new businesses, largely MSN and Windows Live.

Earlier in the day, MSN executives showed off some of the work the company is doing in search as well as in Windows Live services. In a demo, MSN Vice President Blake Irving highlighted Microsoft's effort to turn its Messenger product into more of a social networking tool, showing off a feature--currently being tested in Australia--that allows people to see their buddies' buddy list, assuming the buddy and their buddies opt-in.

The company also announced plans to bulk up the amount of exclusive content on MSN, with a new effort dubbed MSN Originals. In the first of the partnerships, Microsoft is backing new Internet-based productions from Reveille, the production company behind TV's "The Office" and "The Biggest Loser."

Gates said Microsoft is not really taking a new position when it comes to content, noting that it has always created some content but largely partnered with those that do that for a living. "Every month we will have neat new deals with content companies," he said.

In general, Microsoft didn't exhibit a lot of new technology on the first day of the summit, showing mostly MSN and Windows Live services that had been previously demonstrated or are already in beta testing. The company also offered few specifics on just what it plans to buy with all of those new investment dollars, though CEO Steve Ballmer may address those issues when he speaks to the crowd Thursday.

And, even on its home turf, Microsoft took some knocks from some of its ad industry guests who noted that other Internet services have largely captured the mind of consumers.

One of the speakers, ad executive Rishad Tobaccowala, said that Google's rapid iteration of its ideas is "one of the reasons Google is running circles around Microsoft."

MSN's Irving conceded that Microsoft is playing catch-up in some areas.

"We're kind of new here," he said.

But Gates said not to count out the software maker.

"I think this is a rare case where we are being underestimated," Gates said. "That doesn't happen very often."

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Add a Comment (Log in or register) Showing 1 of 2 pages (75 Comments)
Microsoft needs to keep itself honest first!
by JuggerNaut May 3, 2006 6:01 PM PDT
Once you can accomplish that feat, then worry about keeping Google honest!
Reply to this comment
Exactly...
by jasonemanuelson1 May 3, 2006 6:41 PM PDT
Why have one insecure service when you can have many
View reply
The Microsoft Bubble
by jmmejzz May 3, 2006 7:19 PM PDT
is shrinking around Redmond.
Reply to this comment
ya sure..
by FutureGuy May 5, 2006 7:38 AM PDT
..I have been hearing that oh well for the last 5 years, and MS has averaged around 15% growth, if you meant a growing stable bubble, you are on the mark.
Microsoft and Google
by Da Coyote May 3, 2006 7:54 PM PDT
Let's see. The Yugo of the software world thinks that they are
going to keep Google honest? Microsoft never has, and never will
create anything. Their only approach is to copy, cheapen, and ruin.
If Gates bought Intel, they'd announce a two transistor CPU for next
year, delay the introduction four more years, and then have to
recall it due to defects (we hardware folks wouldn't tolerate the
crap that goes into software).
Reply to this comment
microsoft shrinking
by microsoft slayer May 3, 2006 9:03 PM PDT
eventually google will buy out microsoft and axe it.
View reply
I will beat Microsoft
by microsoft slayer May 3, 2006 8:42 PM PDT
with my awesome open source project...how's that?
Reply to this comment
MSN search is still pathetic...
by microsoft slayer May 3, 2006 8:58 PM PDT
Using MSN is like being imprisoned within the microsoft campus. The goal is find an outbound url that takes you away from MSN Hell!!!
Reply to this comment
honest? LOL
by scott_c May 3, 2006 9:13 PM PDT
Honest? That's the funniest statement I've read in a long time.

MicroSoft faced major legal battles in both the US and Europe over dishonesty in how they marketed their products...they forced computer manufacturers to buy Windows licenses for machines on which it was never installed...they insisted that certain features could not be removed from their OS without breaking it and then proceeded to do so when forced to by a judge...

The list probably goes on but that's all I can recall at the moment. Honest was a really poor choice of a word for what Mr. Gates was trying to say (and I do hope they keep Google competitive because that will be good for us all.)

Scott
Reply to this comment
Hahahahaha
by Maccess May 3, 2006 9:35 PM PDT
Pinch me. I just can't stop laughing.

This has got to be the most blatant use of "psychological projection" we've ever seen from a company that has made a marketing strategy out of the technique.

Perhaps its Google that helping to keep Microsoft "honest!"
Reply to this comment
Honest?
by Ian Joyner May 3, 2006 9:43 PM PDT
"For Microsoft, we always want to be in the lead, making the
breakthroughs," Gates said. Well that's a dishonest statement isn't
it. Well MS may as well become the industry policeman on keeping
companies hones, because the DoJ sure failed in their case.
Reply to this comment
Hahaha... Honest?
by UntoldDreams May 3, 2006 10:02 PM PDT
Hahahahahahahahahaha
hahahahahahahahahaha
hahahahahahahahahaha
hahahahahahahahahaha
hahahahahahahahahaha
hahahahahahahahahaha
hahahahahahahahahaha
hahahahahahahahahaha
Reply to this comment
All The Best...Win if you can
by itispals May 3, 2006 10:13 PM PDT
If MSN LIVE delivers better results than Google, then it is definitely a good thing for customers.This is what competition can do. All the Best Microsoft...The first right thing that Microsoft has done is to have accepted that it has lost enough ground to Google and Yahoo. Only when it is realised then the next positive step can be taken...In this sense.....Win If you Can....Its good for all of us.....for we would have more choices...
http://www.buckleupnow.com
Reply to this comment
only problem is...
by Maccess May 5, 2006 2:51 AM PDT
Competing in terms of delivering a better product is totally alien to Microsoft.

The company's idea of competing is by creating compelling products, products that consumers are "compelled" to use it because its the unchangeable default, it's locked in, it creates incompatibilities with competing products, and so on.

But, yes, I would like to see Microsoft create a better product that wins in the market because its better and not because consumers are compelled to use it.
No chance
by pythonhacker May 3, 2006 10:56 PM PDT
The web war is alredy won by Google. Apart from the market share, Google already has something which Microsoft do not - mind share; of customers, of web developers, of geeks, of the average surfer.

Google has already become of Internet, what Microsoft has been of desktop. This is a war Microsoft is deemed to lose, coming from behind.

Stop talking high Mr.Gates and focus on your desktop goals. Get the ever-slipping-never-shipping Vista out of the door and then go and blow your bugle. Otherwise, just shut up.
Reply to this comment
arrogance and stupidity of Bill
by baddata May 3, 2006 11:14 PM PDT
It?s hard for me to understand why the board of directors at Microsoft allow Bill to open his mouth. He makes the entire company look stupid just about every time he speaks. Why would Microsoft the one company that has made a habit of copying and cheating other innovative companies, make a statement like this? Is this just the arrogance and stupidity of Bill?

Beware Microsoft, more and more people are getting wise to you. Someone just might come along and keep you honest.
Reply to this comment
think about it
by mortis9 May 4, 2006 2:11 AM PDT
Why didn't the board shut him up? Perhaps because he's both the chairman and the single largest shareholder. Perhaps?
Gates' so stupid, he's worth billions, and you?
by kamwmail-cnet1 May 4, 2006 6:54 AM PDT
Yeah, Bill Gates is so stupid that he created a multi-billion dollar company from scratch. And what did a ****-ant like you accomplished?

But keep on posting as if what you have to say or do might have an impact. It makes for good comic relief.
View all 2 replies
i think u misunderstand
by df561 May 5, 2006 1:06 PM PDT
"Keep Google honest" is more a figure of speech...and actually it's use here suggests to me that Microsoft has conceded defeat to Google. They are content to come in second. So I'm more shocked about that.
stupidity?
by welcomnetworks May 6, 2006 5:32 AM PDT
Stupidity of who? well, he must know something do ya think...accepted in to Harvard....lets not forget being one of the richest in the world. Yeah I wish I had his "stupidity".
stupidity?
by welcomnetworks May 6, 2006 5:38 AM PDT
Stupidity of who? well, he must know something do ya think...accepted in to Harvard....lets not forget being one of the richest in the world. Yeah I wish I had his "stupidity".


As for the Arrogance, I would have to say if I was Bill Gates I would be pretty arrogant too.
Honest?!
by mathue_tax May 4, 2006 1:49 AM PDT
MS keeping Google honest? What . . is everyone smoking crack this
week or something? First Bob Johnson's UFUD <http://
news.com.com/2102-7349_3-6067167.html?tag=st.util.print> on
May 2nd, then this?
Reply to this comment
say what you like
by mortis9 May 4, 2006 2:17 AM PDT
To argue in any fashion that Microsoft is out of the game at this, or any, point would be to ignore the simple and obvious industry power of the Redmond giant. The largest software company in the world, with cash reserves in excess of the GDP of half the world's countries, has more power to affect the market than people are giving it credit for. Let us not forget that Microsoft also has some of the world's best and brightest people (a few defected Executives isn't shouldn't be construed as a significant loss of personel).

Essentially I'm saying this: the ability to toss 70 billion dollars at a given problem, in this case internet search, shouldn't be forgotten. Call me a fanboy, say what you like, I don't care. The fact can't be ignored that Microsoft still retains the resources needed to make a comeback.
Reply to this comment
For the most part
by freemarket--2008 May 4, 2006 5:55 AM PDT
Microsoft has been unsuccessful outside of the OS and office software categories. When it can't leverage a package using it's desktop monopoly and has to actually compete, it comes up short.
View reply
They lack the talent.
by Bill Dautrive May 4, 2006 7:33 AM PDT
70 billion dollars won't help you if all you have to peddle is crap.

People are finally starting to realize what garbage MS offers.

The only thing that will save them is to do the one thing they have never done: create innovative, useful software that reasonably secure.
View reply
I used to be a big fan of google
by Bob Brinkman May 4, 2006 9:42 AM PDT
I still use it, but two websites I manage haven't been cached by Google in months, where as MSN and Yahoo crawl them reguraly.

It makes me wonder what else I am missing when I do a google search.

Oh well, my the best billionare win.
$70 billion.....
by naterandrews May 4, 2006 5:11 PM PDT
Sure they COULD do that. But what would the shareholders say? Gates is only a pawn. The shareholders hold the largest power. Just look at how sharply the stock fell after MSFT announced a "mere" couple billion dollar increase in spending than expected. Sure, Microsoft COULD spend billions to eradicate Google- but they would have po'ed shareholders, and loss of market capitalization. Would it all be worth it to win over search? A market with lower margins than Windows or Office. I dont think so.

As a side note, I would just LOVE it if Microsoft became the next advertising giant. And we know how they are once they become drunk with power. Am I the only one that can imagine MSFT becoming the next Gator-like intrusive advertising company? I hope they alienate all their customers and drive themselves to the poor house.
Mr Ballmer Throws A Chair at GOOG
by i_made_this May 4, 2006 5:42 AM PDT
All I wanna know is did the guy do it or not??? The press reported he did. George Walker Ballmer denied denied denied. Hmph.

Youth wants 2 know!
Reply to this comment
You want the truth from MS?
by Bill Dautrive May 4, 2006 7:36 AM PDT
Never going to happen. Honesty come more naturally to a con then it does to MS.

Did he do it? Who knows, but it is certainly within his 'character'. The man is a hot-headed, retarded clown.
it's apparently obvious
by monarch2 May 4, 2006 6:28 AM PDT
take a look @ the prices of their stocks over the last 5 years, oh yeah, with google better make it only the last 18 months
Reply to this comment
Ah yes...
by Ted Miller May 4, 2006 7:22 AM PDT
Our baby imperfect brother has become a teenager. Soon he will be a man. Ah yes our BIG BROTHER who will help us better our lives and protect us from our selves. He has entered our homes viewed our naked wives and checked the contents of our tolits with the eye in the sky. Thank you Mr.Bill for your concern for us. It is good that you are expanded you perfect and wonderful windows operating systems in all aspects of our lives. Yes Bill you can do better then anybody, you are the best nothing like the rest. You borrow their code and do it one better. Thank you Mr. Bill for taking the position of God after all you are the richest and all I can say is I am glad that man lives apx. 70 years and by special mightyness 80 years.
Bill? How many years do you have left? I mean we have left? To think all your money will not buy you one minute more. Happy times Bill in your VAIN pursuits. Cast your eyes on the rich forgotton men in cemetaries with crumbling tombstones only to be dug up by a future archeologist and placed into a museum with the wrong iterpetation of who you where. In othere words Bill do some good with your money like investing in Google and others and let them finish the work the are doing and concentrate on making your windows software into something more perfect then what it is. Do good to your neighbor. You may find them liking you more.
Reply to this comment
Uhhh bill is god?
by welcomnetworks May 6, 2006 6:21 AM PDT
You borrow their code and do it one better. Thank you Mr. Bill for taking the position of God after all you are the richest and all I can say is I am glad that man lives apx. 70 years and by special mightyness 80 years...

How did you get taking the place of god out of that?
What..Microsoft the NEW...
by OneWithTech May 4, 2006 7:47 AM PDT
..Frick'n browser police. Keep Google Honest! Coming from one of the most dishonest corporations next to ENRON!

Here, take this prediction to hart Microsoft, by the end of 2006 Google will have produced a browser of all browsers. Notice I didnt' just call it a web browser because Google has already proven that I can browse anything, it just doesn't use it's own BROWSER yet! YET!

~Justin
Reply to this comment
It is never going to happen. IE will be the leader.
by dosts May 4, 2006 10:44 AM PDT
It is never going to happen. IE will be the leader.
View all 2 replies
Windows is key
by welcomnetworks May 6, 2006 6:29 AM PDT
that would be kinda funny if Microsoft made googel products non compatible with Windows Vista...just a thought
Google Finance gives the competition a run for the money
by gerard rotonda May 4, 2006 9:40 AM PDT
As quoted "Google is apparently unique in the industry in that they're treating recruiting as a network effect, similar to auctions or operating systems. Smart people go where smart people are, which enables them to launch cool stuff, which attracts more attention, and suddenly you have a feedback loop. At some point, enough smart people want to work there that it's not simply enough to be smart; you have to market yourself.

That kind of feedback loop is happening here too, but not at the same scale, because Google is being far bolder, cleverer, and more overt about setting up the feedback than we are (or anyone else is, for that matter.)

If you think about it, marketing ourselves as programmers isn't really something we've had to do in a very long time. When I was in school, worried about job interviews, a more senior guy in my class told me not to worry ? he said that your first interview is you marketing yourself, but after you have some experience, the companies are all competing to hire you. You get to pick and choose. I felt a rather awed disbelief at the time, but experience bore his assertion out, for the most part. In the 1990s, as long as you weren't a complete idiot, interviews tended to start and end with "when can you start?"

But not at Google. Now even some of the smartest people wonder whether they'd get a job there. Rumor has it that if you don't have a Ph.D. or equivalent, don't bother applying. Regardless of whether that rumor is true, it's contributing to the marketing hype.

So Google has no trouble finding good people, because through careful maneuvering, they've convinced most of the world that Google is where the smartest people work. By doing so, they've begun to create a network effect that's leaving many of their competitors to scrabble for "leftovers". "

As quoted


Gerard Rotonda
Reply to this comment
M & G
by dosts May 4, 2006 10:42 AM PDT
All comments below are from only people who support G it seems and loyal to them. Just Search is not everything in this Computer world. I am wondering why so much one sidedness. We have seen M all these days. G will show its true colors in coming yrs and then let us see some x will emerge.
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