Microsoft's Steve Ballmer Calls Rivals 'Pretenders'

Ballmer admitted Microsoft's a long way from taking over the top spot or any other in search and advertising. "We've got a lot of work to do to differentiate ourselves in search and advertising," he said. "We're number three, working to be number two, and working to be number one." Within the last few weeks, the company began rolling out some significant to its search products to try to catch up.

Actually, Microsoft is only number three if he's not including China. A global study released this week by comScore placed Microsoft fourth behind Google, Yahoo and Chinese Web portal Baidu in search. Still, Ballmer hinted there might be something more significant up Microsoft's sleeve. "We're going to try to re-write the rules on how [the search and advertising] game works, and when we have something to say there, you'll see it," he said.

There may be a few new billion dollar businesses on the horizon for Microsoft, other than advertising. Ballmer said that SharePoint is "closing in on a billion" and that systems management products in the form of System Center are not far behind. He also said he thinks Office Communications Server, the unified communications server being released next week, can become a billion dollar business. Gartner analyst Yvonne Genovese stuck it to Ballmer about her problems with Windows Vista. She was an early adopter, buying and installing Vista after her daughter gave it two thumbs up. "I like your daughter already," Ballmer said. "You're not going to like her mom in about two minutes," Genovese snapped back. She re-installed Windows XP after only two days on Vista. Ballmer kept up. "Your daughter saw a lot of value," he responded. "She's 13," Genovese quipped. "She's a user, and you're going to hire her in about nine years," Ballmer said with the last word. That's not to say Ballmer didn't admit there were some problems with the Vista roll-out. "When we initially shipped, fewer device drivers were ready for Vista than I would have liked," Ballmer said. "Same thing on applications, because of the changes we made in security, there were some things applications needed to do. Taking care of some of the issues is important. We've got SP1 out in beta; it addresses a lot of the customer feedback. Microsoft got customers annoyed after continually delaying Vista and Longhorn Server, now Windows Server 2008, and Ballmer said the company might be getting a little tighter with release dates as a result. Following Apple's lead, Ballmer said Microsoft might not say much at all about consumer products until they're released from now on. "Just the way the consumer market works, the element of surprise is actually of some value in the marketplace," he said. Ballmer predicted many Microsoft products will never become entirely browser-based. "The truth of the matter is you will never be able to do as good a job on Microsoft Office if you're just browser-based as you can if you're rich client based," he said. "But we need to simplify deployment. That is the bigger issue. Software should be able to self-manage, desktops should be able to self-update."