Microsoft Search: Q&A With Steve Ballmer On The Importance of Bing

Posted by: Peter Burrows on May 28, 2009

I interviewed Microsoft CEO Steve Ballmer on May 22, as part of the reporting for our story on Qi Lu, the new head of the company’s struggling Internet division, and on its new search offering, dubbed Bing. Here are some excerpts:

Q: Already, there have been many articles suggesting that Kumo (the code-name for Bing—the name had not been announced when I did this interview) is not that different from what Google and Yahoo are doing or plan to do. In fact, Google recently unveiled a feature that lets you pull up a left-hand pane that is similar to the one in Kumo.

Ballmer: Now Google is scrambling, showing some stuff that in some ways is similar, which is fine. You’ve got to expect that. But you know, we are just starting to point in a [new] direction. It’s not like [Bing] completes the path to a complete break [from existing search experiences], and frankly, customers don’t want a complete break. There are things that work well in today’s search engines, and then there are all of unmet needs.

Q: So why is Bing an important announcement?

BALLMER: It’s important in at least three or four different ways. And in each case, we recognize it’s over the long haul. Number one, it’s a break from our past, and I think it’s a break from what search engines are doing today.

Number two, for the first time we’re going to really give search its own identity. That’s very important. You know, for all of the discussion, the word Google means search [for many people]. People think, “if I’m going to search, I’ll go to Google”. That’s not how you think about Yahoo. Yahoo is search plus a bunch of other things. Same with MSN today, I would say. What we’re going to do in the consumers’ mind is say, hey, the two guys who really care about helping you navigate the Internet are us and Google.

Number three, we’ve made a number and will continue to make a number of distribution deals, which don’t happen to coincide per se with the launch, because the deals happen when the deals happen. [Microsoft has cut deals to make its search the default on PCs from Hewlett-Packard and Dell, and Verizon phones.] But the deals make sense in the context of really getting after search. Distribution by itself doesn’t get you anyplace because people can always type www dot anything or change their defaults. But at least it stakes a point of view.

And last but not least, we’re hard at work on some alternatives in terms of thinking through the way revenue gets divided between the consumer, the merchant, the advertiser, the content provider, and the search engine. And you’ve seen a little bit of that in our CashBack program, and you’ll see a little bit more of that and some derivatives of that that as we move forward with this launch.

Continued after the break:

Q: What are your goals for Bing, in terms of market share and competing more effectively with Google?

BALLMER: When you're up against a guy who is as dominant as Google is in this business, you can't expect anything to happen overnight. But you can make significant progress. And frankly, at least for the time being, a significant percentage gain in share relative to our current base isn't that much of a whack to Google.

Q: So where will your market share be a year from now?

BALLMER: We don't choose to put public targets out there. I think we've got a good product, and we'll make some progress. [But] doubling our share in a year isn't going to happen. If it did, that would be fantastic. But we're going to pick up share.
Most users do happen to use more than one search engine, either by design or because they couldn't find what they were looking for or whatever. We want people to get in their vernacular that “hey, it's worth taking a look at the point of view from Microsoft.”

Q: So how did you get to know Qi Lu? I’m assuming you got to know him during the negotiations with Yahoo?

BALLMER: No, not at all. I might have met him once four or five years ago in a prior round of negotiations or something. I basically did not know him at all through Yahoo.

Q: Why is he the right guy for the job?

BALLMER: There are many pieces of [what people refer to as] online, and they're really not all the same. Social networking is different than portals is different than search. And there’s thinking about this as a media business and thinking about it as a search business. I'm not saying [all of these] are inconsistent, but you can give various weights to various factors. And Qi has a very differentiated point of view from everybody we've had leading this business before him. We've tended to have either what I would call solid engineering managers but with no particular depth and expertise in this area, or we tended to have general business people or media people.
So I said, hey, look, here’s a guy who has studied the economics and knows the business, and he's not a narrow person in the slightest. But on the other hand, you know, he's as deep as you can get in really understanding the dynamics of search, both on the economic side and on the algorithmic side.

Q: Clearly, there’s an offensive reason for Microsoft to want to be a leader in search, in that there are billions of dollars in sales and profits and growth. But there’s also a defensive reason: If you’re not a big player in search, it opens up the playing field for Google to move more aggressively into places where you guys dominate. How much of your Internet strategy is about protecting your core businesses?

BALLMER: You really can't do things for defensive purposes. You really can't. So we're doing this for offensive purposes. It doesn't mean that it might not help us with defense, but any time you start doing things for defensive reasons, I think you're in big trouble. That's just a bias I have.

Q: There are those that I talked to that wonder if Qi, who is known as a technologist, has the business acumen necessary for the job. Many people think you may have hired him because he would be ideal to integrate Yahoo’s search operation if you ever do acquire it.

BALLMER: Nope. He's absolutely the best guy on the planet to run a search business. There are very talented people at some of our competitors, but probably nobody has the mix of exposure to both the technology side and the business side that Qi does.

Q: Can you give us any update on talks with Yahoo? When is the last time you talked to [Yahoo CEO] Carol Bartz?

STEVE BALLMER: I have no update I can give you on that. I could give you the same old "blah blah blah" that I've been giving for months, if you want it: we're not interested in acquisitions, we still think a partnership can make sense when the time is right, I'm sure we'll talk about it, blah blah blah. It’s the same blah blah blah.

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Reader Comments

Abe

May 28, 2009 12:24 PM

What's with the interjections in brackets inside this interview.

If Ballmer says, "You know, for all of the discussion, the word Google means search [for many people]," then don't change it to, "You know, for all of the discussion, the word Google means search [for many people]."

It's journalism 101. What goes inside the quotation marks is only what the person said. No interjections or explanations by the writer, particularly when the writer will change the meaning.

Rick

May 28, 2009 12:58 PM

The man's capacity for meaningless blather is amazing, almost admirable. Microsoft will once again come up short, offering nothing new or compelling. They will not resist their usual uncontrollable urge to try and somehow lock people into more of their products and services, alienating most newcomers.

They're an old dog, incapable of learning new tricks. Yet again, we will see the same old Microsoft show play itself out, and afterwards the usual disingenuous tech pundits will scratch their heads pretending they didn't see it coming.

Sarah

May 28, 2009 02:19 PM

At least MS is trying to do something different. Brains over brawn? We'll see. Cool article here: http://www.atelier-us.com/internet-usage/article/microsoft-livesearch-makes-way-for-newcomer-bing

sean

May 29, 2009 03:24 PM

i call those Ballmer bashers shut up. you don't know what you are talking about. the more you talk, the more you show your stupidity.

Bing will come out a winer. here i give you a couple of reasons:

1. Bing is better overall comparing to any current search engines.
2. Bing interface is compelling, which is important for general users.
3. Reports say 25% user need click back button to finish a search. I personally feel this number can be much higher, i would say 90% person an more, since regular search engine only give you links, you have go into them and explore and find your answer. Bing gives you more knowlege before you go into the websites. that saves a lot of time.
4.Qi is a hero, both in chinese and generic race groups. he is probably the most successful chinese with both this high business rank and professional rank in US. His road from bottom to top is a story for every chinese to admire. That hundreds of millions people. He is also universally beloved by almost everyone who worked with him.
5.i haven't even mentioned Microsoft's resources

g.e.

May 30, 2009 09:44 PM

verb up..? hope people don't say i got bing'd

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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