Steve Ballmer was first at bat as the Web 2.0 Summit in San Francisco resumed for the second day. His best line, and classic Ballmer, was about how Microsoft's search efforts are going versus Google. "Microsoft [search] is just 3 years old and playing basketball with 12 year olds. It may take until he is 8, 9 or 10 and you are going to dunk, and we will dunk on them. "In other words, the relentless Microsoft will dunk on Google search and ads over time, according to Ballmer speak.
Microsoft will continue to invest in buying technology, products and market share. "We'll buy 20 companies a year consistently for the next five years for anywhere between $50 million and $1 billion bucks," Ballmer said.
Regarding acquiring Yahoo, which would be more than a paltry $1 billion, to gain more traction with advertising and Web share, he said, "We believe in our independent path." He didn't exactly rule out a union but it sounded like the two companies are pursuing their separate paths for now.
Conference co-host John Battelle asked Ballmer about making a substantial investment in Facebook. "We have a great ad partnership. We'll see where it takes us," Ballmer said. As expected both Facebook's CEO Mark Zuckerberg and Ballmer are dodging the question.
On calling Google a "one-trick pony" in the past, Ballmer explained, "When I use the 'one trick pony' I meant in a very specific way. Companies start in one area and fill around core." He mentioned Cisco filling around a networking core, IBM around an enterprise...and Google around search and ads. "We have two things--desktop and enterprise. We are trying to have three or four, with devices and entertainment. We are fairly unique ourselves. Generally it confines you if you are wed to one basic technology approach and business model."
What does Ballmer make of Facebook's 100,000 developers? "They have done a really nice job on the developer platform. Any exciting application will have a developer story but that doesn't necessarily replace an operating system. They have their own unique extensibility model and developer community," Ballmer said.
On the topic of Microsoft's Silverlight, a competitor to Adobe's Flash and AIR, Ballmer said, "Web applications will continue to get richer and richer in the kinds of media and logic associated with them. Windows and Mac don't go away. Adobe has done good job on rich media stuff, but it's a long way to go."
On the topic of cloud-based Office suites, Ballmer said, "It's not that my job to do applications of a given computation model, but to deliver productivity," Ballmer said.
He was asked if he thought Google Docs & Spreadsheets was a good product. "If you want to do what most of what our customers want to do with Office, no I don't. But if you want a few people to collaborate on a fairly simple thing, there are some nice collaboration software on the Web." Microsoft recently introduced Office Live for Workspace, which Ballmer said provides richer collaboration for every Office user.
Ballmer addressed the question of how Microsoft would get to a point where 25 percent of its revenue would come from advertising. "We have to do four things very well. You have to do search well. The most valuable ad real estate comes out of search. You will never attract critical mass of advertisers without search," he said. In addition, Microsoft has to be good at community and communications, such as IM and the relationship with Facebook; build a strong advertising platform that addresses all media and devices; and sell ads on behalf of other people, moving into the syndication business as it has with Facebook and Digg.