Microsoft's Ballmer Sees Search Ads as Next Dollar Bonanza

31 January 2007

REDMOND, Washington: With Windows Vista finally launched into a market that's either wildly enthusiastic or indifferent (depending on who you are listening to), the world's favourite hate object, Microsoft Corporation, is pondering where to dig for its next billion dollar pay dirt.

Beset on the one hand by Google's move into online business software, and on the other by the growing popularity of open source programs, an advertising-supported business model is seen as the most fertile ground, Microsoft ceo Steve Ballmer told the Financial Times in an interview this week.

"We're the number three seller of internet advertising in the world, so we've embraced [the concept], and now the question is where do we go next?"

As is the wont of powerful honchos, Ballmer answered his own question without pause for breath.

"The [current search] experience leaves a lot to be desired. Something like 50% of searches don't actually result in an answer to the user's question ... the average search I think is 2.1 words.

"Isn't that odd? Why don't people type more into search queries?" Again, Ballmer answered his own question. "Because they have learned the more you type, the more false positives you get."

Ballmer believes there's opportunity aplenty for new thinking on search - an area where Microsoft is in the unaccustomed position of underdog with just 8% of the US market compared with Google's 51%.

No surprise, then, that Microsoft's first three product priorities in the online category are "search, search and search", Ballmer borrowing from Tony Blair's infamous political soundbite "education, education and education" - which the British politico in turn heisted from 19th century French historian Jules Michelet.

Microsoft, as the underdog, might find it easier to change than those with a bigger market share, Ballmer believes. "Frankly, if you are market leader, it is a little harder to break out of your pattern than if you are not the market leader."

Data sourced from Financial Times; additional content by WARC staff