Ballmer Still Has It Yin For Yang

Steve Ballmer just can't quit bashing Yahoo co-founder and ex-CEO Jerry Yang. During Microsoft's annual mid-year analyst meeting held this morning, the Microsoft CEO quipped, "I don't want to be known as the Jerry Yang of this episode."
The episode in question is Microsoft throwing good money after bad in a seemingly quixotic quest to gain on Google in the search advertising market. Ballmer himself admitted that Microsoft's ad search business is "extremely unprofitable." (What he meant by that Yang comment, he noted, is that he wouldn't "keep investing without a return.")

So Ballmer's antidote to being the next Jerry Yang?

"I'd like to somehow pool with Yahoo," once Carol Bartz settles in as its CEO, he said.

Naturally, that got the room buzzing, and Ballmer immediately tried to dampen any speculation that he was interested in revisiting the acquisition question.

All he meant to suggest, he protested, was that it seemed only natural for Yahoo and Microsoft to "somehow figure out to a way to get together and compete better [against Google]."

Ballmer acknowledged those critics who suggest Microsoft just give up, but Ballmer is nothing if not stubborn. And, he reasoned, "if you give up, you can't get back in the game."

The question, though, is why Ballmer wants to stay in the game at all, given the amount of money he's spent to remain an also-ran?

Maybe it's because Ballmer sees search as a way of vying for the center of the chess board, the strategic place from which to check mate your opponent.

Google is already using the war chest it has accumulated with search to inch progressively towards that center, slowly but surely taking share from Microsoft. Ballmer admitted that Google is gaining strength in PC operating systems, while, in mobile, "Google barely registers so far, but we have to take it very seriously."

Ballmer has decided that the only way for Microsoft to repel Google's attack is to go after search, at least forcing Google to expend some resources defending its own turf. "Search and advertising are extremely important competitively," he said.

No wonder, then, that Ballmer remains fixated on Yang, whose obstructionism prevented Ballmer from getting the search alliance he wanted last year.