Ballmer: Microsoft ‘hell-bent’ on success in ads
Wednesday, January 30th, 2008
The largest software company is hosting its Financial Analyst Meeting at its Redmond, Washington, headquarters, where Ballmer described Microsoft’s strategy as making several big bets on emerging businesses while drawing more revenue from its mature desktop and server software franchises.
Microsoft is transforming its product development and business models around “software plus services”, or software complemented with online services, he said. The company has been criticised by financial analysts for being slow to capitalise on advertising revenue as search giant Google has done.
“We are hell-bent and determined to allocate the talent, the resources, the money, the innovation to absolutely become a powerhouse in the ad business,” Ballmer said.
Company founder Bill Gates, who made a presentation before Ballmer, announced that Microsoft is opening a dedicated centre to research online advertising and search called the “Internet Services Research Center”. Headed by Harry Shum, the centre’s research will focus on search relevance, spam prevention and searching scanned images, such as book pages.
Ballmer said that the company is tackling disruptive technology changes head-on, namely the shift to advertising-supported web services. Its commitment to online services and consumer devices are necessary because they provide avenues for the company’s software.
He defended continued investments in two unprofitable divisions: Online Services and the Entertainment %26amp; Devices division. Microsoft’s multi-year commitment in server software for corporate data centres diversified the company and created a multibillion dollar revenue engine.