Ballmer questions business strategy of Google

Microsoft CEO Steve Ballmer criticized rival Google, saying it is devoted primarily to ad-supported search while Microsoft has reinvented itself many times over.

In a presentation Thursday at the Graduate School of Business at Stanford University, Ballmer said a truly entrepreneurial company invents something, builds a business around it and then starts the cycle again. But Google hasn't yet emerged beyond ad-supported search, he said.

"They're really just one business, a search and advertising business," he said, although he gave Google credit for reaching the $10 billion revenue mark quicker than did Microsoft.

However, Microsoft began selling desktop software, particularly its Windows operating system, then created software to run servers, moved into the Internet space with its Internet Explorer Web browser and MSN Search, and more recently, moved into consumer electronics with its Xbox video gaming system.

In a brief interview with IDG News Service after his presentation, Ballmer acknowledged that Google's 2006 acquisition of the video sharing Web site YouTube might qualify as a second entrepreneurial wave for Google.

"They're trying to make it into a second one, that's right and we'll see how they do," he said. "Bravo to them [for] trying to start a second business. But it's a related business, it's not a completely second [one]."

Google was not immediately available for comment.

In an hour-long public interview with Robert Joss, dean of the Stanford Business School, and responding to students' questions, Ballmer also said Microsoft's IPTV platform is another entrepreneurial cycle for the company.

Microsoft began developing technology to deliver television programming over the Internet in 1994, even though investment analysts at the time were skeptical it would succeed. Today, Ballmer said, IPTV is finally gaining traction as telephone companies offer TV programming to compete with cable TV companies.

"Just now we're really starting to see the telephone companies getting after this as a real proposition," he said. "We stayed patient, we stayed persistent and today I think our [telephone company] customers are going to take a big share of the TV business and the innovation will be built on our IPTV platform."

Ballmer got his undergraduate degree in mathematics at Yale University. He entered Stanford's Graduate School of Business in 1980 but left after just one year, to take a job at Microsoft offered to him by now-Chairman Bill Gates.

Copyright © 2007 IDG Communications, Inc.

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