Ballmer dismisses Google Android threat

Microsoft chief executive Steve Ballmer on Thursday dismissed Google's Android operating system, saying he believes it to be financially unsound.

Speaking at Australian telecoms company Telstra's annual investment day, Ballmer said it was Google's first phone operating system and designing one wasn't easy. "They can hire smart guys, hire a lot of people… but, you know, they start out way behind in a certain sense," he said.

He questioned Google's ability to make money with Android. "I don't really understand their strategy. Maybe somebody else does. If I went to my shareholder meeting, my analyst meeting, and said: 'Hey, we've just launched a new product that has no revenue model!'… I'm not sure that my investors would take that very well. But that's kind of what Google's telling their investors about Android," he said.

Ballmer said that, although the idea is Google gives away the operating system and in return gets to put its search on devices for free, he believes telecommunications operators would still ask to be paid to carry search.

The lack of certainty concerning money means that improvement of the operating system will be neglected, according to Ballmer, who said that there is other competition he is more worried about.

"Google doesn't exactly bubble to the top of the list of the top competitors we've got going in mobile. They might some day. But right now..." he said.

Telstra chief executive Sol Trujillo also jumped in with his opinion. "My view is: it's interesting; not compelling."

The Telstra leader also wondered if Google had the expertise to follow through, saying that there are always issues in a first-generation device which have to be ironed out. "Yes, first generation you make the sale. The question is when you get into the second, third and fourth generation," he said.