Don Dodge on The Next Big Thing: Steve Ballmer at Web 2.0 Conference

Steve Ballmer is on stage at Web 2.0. Steve explained that Microsoft is a big company and competing in lots of areas. Microsoft is not a one trick pony. Obviously the Windows Vista operating system, both client and server, are huge businesses. SQL Server is the leading database in the world. Microsoft Office (Word, Powerpoint, Excel, Access) is another $15 Billion dollar business. But, Microsoft is moving in new areas like search, Live Services, Windows Mobile, CRM, Xbox, Zune, and advertising. All potential multi-billion dollar businesses for Microsoft.

Steve said all the businesses are doing well, but there is room for improvement in each of them. Microsoft came from nowhere in web search and now has about 10% of the market. Microsoft is working hard to improve search and take more market share.

Advertising is a big push for Microsoft. The $6 Billion acquisition of aQuantive is evidence of the commitment to advertising as a business model. Software and Services will be delivered in many different ways and supported by several different business models such as free, ad supported, subscriptions, and more.

Dan Fernandez is now on stage doing a demo of Silverlight, Windows Live, and Popfly. Cool stuff. John Battelle commented that all this stuff looks very Web 2.0. Hmmm...we are at the Web 2.0 Conference.

Office Live and Office - where is it going? Outlook is available on the desktop, on the web, on your cell phone...everywhere. We want all our software products available anywhere anytime to provide the best user experience. Office Live Workspaces brings rich web collaboration experience to all of our users. Word and Excel are still the best place to do serious work.

Search is just 3 years old...competing against 12 year olds. Someday that 3 year old is going to beat the older guys. Steve used a basketball analogy to explain that Microsoft Live Search is like a 3 year old playing basketball against a 12 year old. He is encouraging his 3 year old and has great confidence. Someday that 3 year old will beat the 12 year old and dunk on them. Steve was hilarious, the audience was really engaged. I am not doing it justice here, but if you have ever seen Steve get excited...you can visualize this.

What else is important to Microsoft? Search is critically important. Communication is important, things like IM, facebook, etc. Advertising is important on all platforms, web, cell phone, software, everywhere. Advertising platforms are hugely important and thats why we bought aQuantive.

What about Facebook? Microsoft has a big deal with Facebook to be the exclusive seller of advertising through the Microsoft network. Steve said we are learning more everyday about how to succeed. We are doing well, and will do better as time goes on.

aQuantive was a $6 Billion dollar acquisition. What made it worth so much? They have a great tool set for advertisers, important data on customer behavior, for targeting and great tools for publishers. They also have a very large advertising agency. Four really big businesses.

What are you interested in? We buy 20 companies a year and will continue for the next 5 years. We have made big purchases in advertising, mobile applications. There are only a handful of companies in the $10 Billion or more range, so we tend to focus on the $50M to $100M range acquisitions.

Will Yahoo and MSN merge to take on Google? Yahoo is a good company. We have a good relationship, and we respect them. We believe in our ability to compete. If we didn't think we could win with what we have...we shouldn't be doing it. We are in it to win.

How will ad syndication get redefined? Most of what goes on today with syndication is text ads sold by auction. Look for video, pictures, guaranteed delivery, rate card vs auction, contextual targeting based on user behavior.

Can Microsoft still move quickly? Microsoft is a company of 80,000 people. It is big, but we are flexible. We encourage people to do what makes sense. When we get interested in something or a company...we can move very fast.

What about open source? We will buy smaller companies that use open source, Java, PHP, etc. It is not a blocker to acquisitions and partnering. We partner with lots of companies.

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3 Comments

This is a message that Ballmer needs to be spreading on a regular basis. MSFT is clearly moving on a lot of fronts but Vista and Office get most of the attention. Then again, when you have two giant businesses dominating the scene, it's hard to get people to focus on the other stuff you're doing.

Mark

Posted by: Mark Evans | October 18, 2007 at 01:48 PM