TechPulse 360

Steve Ballmer, CEO, Microsoft. The company told investors it will loose 5-10% of its operating income for several years to gain market share in Internet search.

Listening to Ballmer the other night at the Churchill Club, It felt like Microsoft is not interested anymore in buying Yahoo. The initial idea for the $40+ billion acquisition was to get a “position” in the Internet search market. But retrospectively, Yahoo is more of an Internet company than a search company a-la Google:

“Being a big Internet company doesn’t make you a big search company. We are a big Internet company. We are the third biggest Internet company. But translating general success on the Internet with   the specific success in search, meaning you’ve got to do the right job in search. As to relate in improving our position in search, the way to get there is to go do it on our own, there’s nobody out there”, said Ballmer

Microsoft Search Strategy: It’s a 5 years “money-loosing” task

Ballmer also reminded the audience that Microsoft is in search and search sponsored-advertising for the long-haul and that the company is willing to loose 5-10% of it’s operating income for several years to get share in search. Asked if Microsoft will have to up-spend Google, Ballmer admitted that as an outsider he had to “up the ante” or double-down just to be in the game!

“If anybody is going to provide any real competition in search, in search based advertising to Google, I think Microsoft maybe unique in our ability to provide some of that competition”, added Ballmer.

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