Ballmer Says Microsoft Won't Ship Office 14 This Year

Slow PC sales may have eased demand for a Web-based version of the Word, Excel, and PowerPoint bundle.
While large companies aren't replacing Office with Google Apps or similar offerings from others like Zoho, they are using the low-cost products to save money. Companies are using the services for temporary employees or for workers that use very limited capabilities in Office, such as only Word to create simple documents, McLeish said.

"The question is, how fast can Google move to take advantage of the slow release of Office Web?" she said.

In the long term, Microsoft believes Office Web will protect its Office cash cow, which along with Windows generates a sizable portion of the company's revenue. Companies are attracted to hosted software offerings because they bring less complexity and easier maintenance than boxed versions. The downside, however, is that hosted applications can't be accessed when Internet access is cut off.

Microsoft's strategy for the Web is to continue to push traditional desktop applications and client operating systems while also releasing complementary hosted products. The company calls the strategy "software plus services."

In other news at the analysts meeting, Ballmer said he would like to talk with new Yahoo chief executive Carol Bartz about a possible Internet search deal. Bartz recently replaced Yahoo co-founder Jerry Yang as CEO. Yang left the post amid shareholder frustration with his failure to reach a merger deal with Microsoft, which had offered $47.5 billion for the portal in early 2008. The bid failed after the two companies were unable to agree on a price.

While Ballmer has said he's no longer interested in taking over Yahoo, he has expressed willingness to enter a search deal to compete with Google, which dominates the search advertising market.

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