In a just posted interview with Bill Gates and Steve Ballmer, Ina Fried and Michael Kanellos from News.com sit down with both MS execs and talk about a number of topics including search, Google, etc. Perhaps the most interesting tidbit from this interview is that one year ago (to the day) it was Gates who said, "today search is nothing." In this new interview he told News.com that, "search is bad today."
Danny also mentions this comment in his post directly below this one.
Here are a few highlights from the just posted News.com interview.
Ballmer sees upstarts and "the Googles" offering "ad-funded versions" of software that MS has traditionally sold.
Bill Gates on Ad-Supported Software
Is it a better competitor once they stick ads in? That's the thing that's so goofy I don't get it. Actually, that was one of the few announcements in our industry that was sort of a fraud that actually was unmasked by the press; the first ever was that Sun-Google thing where people were saying, well, what the hell is this?
What's the expression, to a man with a hammer everything looks like a nail? If you know how to sell advertising, everything is going to look like an advertising problem. I think people like to say the same thing about us.
Ballmer adds that MS already has a one billion dollar a year ad business and they will grow the "hell" out of it. They will also grow their packaged business and have a big subscriptions business.
So we need to have all three muscles or we are vulnerable, but nobody else is even trying to have all three muscles.
On Growing Advertising
Ballmer tells Fried and Kanellos that it will take awhile.
First of all, advertising isn't all about search. Search is a good vehicle for advertising, but there are other good vehicles for advertising. We basically have held share over the last couple of years. Some other guys have gained a little share, but we've basically been relatively flat on share and growing nicely with the market. How do you grow? You have exciting experiences that people want to participate in, whether those are communication or search or content.
Gates joins in and says that search is bad today. He said something similar to this a year ago. More personalization is needed. Ballmer adds that half of the searches don't give you an answer you want.
Gates on Search
Well, search is bad today. The average search takes five minutes. It doesn't really understand what's local versus what's not local. You know, you type in "pizza" it's going to tell you about someplace 1,000 miles away. It doesn't understand the context of are you trying to get advice for using the product or buying a product, are you an expert, do you want the historical data, do you want the most recent data, all of these things that can be done. And so search is not personalized right now, and we've been making some advances. We've been driving our relevance up and up and up, and we have this way of really slotting in third-party expertise and letting you do some programmatic things against search.
You do me-too Google Talk, and it's a big deal. But we had our honeymoon phase, and it was fun from maybe 1985 to 1995. And we've had lots of competitors in their honeymoon phase. But I'd say, in some ways, this is the biggest honeymoon I've ever seen.
Postscript: For more comments from Mr. Gates, see this Reuters article: Gates sees IBM, not Google, as top Microsoft rival.
Asked if Google represents the most formidable threat of the company's 30-year history, Gates replied with a curt "No...The biggest company in the computer industry, by far, is IBM. They have the four times the employees that I have, way more revenues than I have. IBM has always been our biggest competitor. The press just doesn't like to write about IBM," Gates said.