Steve Ballmer uses final investor call to target Google

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Steve Ballmer uses final investor call to target Google

Cliff Saran

In his last investor call as CEO of Microsoft Steve Ballmer attacked Google’s business practices.

He also confirmed that Microsoft will focus on using its devices to broaden the appeal of its commercial services.

microsoft steve ballmer.jpg

Prior to announcing his retirement last month, Ballmer outlined how Microsoft would become a software, hardware and services business.

Earlier in September, Microsoft announced it would acquire the mobile device arm of Nokia for $7.2bn. At the time experts expected Microsoft to develop Nokia handsets as part of a Windows Phone ecosystem, analogous to Apple iOS, iTunes and the iPhone.

In the investor call, he said: "We're going to integrate our services with our devices. We'll also make our services available on other people's devices, both to the consumer and to the enterprise."

Ballmer told investors Microsoft would partner with companies to compete with Google, which has been eating away at Microsoft's traditional Office and Windows businesses. Organisations such as Telegraph Media Group and Reed.co.uk have moved users from on-premise Microsoft Office to Google's rival browser-based product.

The acquisition of Nokia's handset business gives Microsoft a stake in the smartphone market. Surprisingly, Microsoft aims to push its rival Bing internet search out to the masses via a partnership with arch-rival Apple.

"The easiest place for us to get scale is on our own devices or on somebody with whom we are closely aligned. We're very pleased to be providing Bing results as part of the Siri offer now with Apple. And you might say, wow, that's unusual. But we have made an investment that Apple hasn't and we found a way to partner with them."

Bing is set to become a major part of Microsoft’s future plans, to enable the software company to bolster advertising revenue from internet searches. Ballmer admitted it was still quite heavily focused on the US. Comparing Bing to Google, he said: “If we have exactly the same quality of algorithms, but a lot less scale in search advertising, we will get less revenue per search than Google does.”

Rumour has it that Google pays Samsung and Apple $2bn to 3bn a year for distributing their search product

Steve Ballmer, Microsoft

Scale only comes by tackling the mobile market. But putting its search engine on third-party devices costs money. Ballmer said: “Google has more money to pay for distribution on Samsung devices, or Apple. Rumour has it that they probably pay each of those guys $1bn to $2bn to $3bn a year for distributing their search product. So we have to generate volume in order to step up.”

He also said competition authorities should look at Google’s business practices: "I do believe that Google's practices are worthy of discussion with the competition authority, and we have certainly discussed them with competition authorities. We've highlighted some of their bad practices in bundling YouTube and Google Maps and some other things. I think they need pressure from the competition authority. I think they need pressure in the marketplace.”


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