Here's the FUD
"We will catch Google in six months in relevancy"
No Steve, you won't even catch up to what Google was in 2002 in six months. Why make a statement like that? Previously when MS when spread doubt about a product or a competitor's offering it was to prevent acceptance in the marketplace. Well Google is already widely accepted in the marketplace. No one is going to hold their breath or stop using Google because they are already #1 in the marketplace. Can making a statement like do anything but prove Ballmer wrong and MS silly? The simple fact is this sort of FUD approach is simply not going to work with someone is the proven market leader. My advice to Ballmer is this; Make a better search than Google first. Then announce and advertise it. Stop pre-announcing you are going to be where Google was a year ago. It makes you look silly and when you cannot even match Google it looks horrible. For example MS is currently advertising MSN search. This is a mistake because MSN search is a qualitatively poorer product. People try it, note "Boy that sucked" and go back Google. You are just damaging your brand by advertising a shoddy product. Remember that the change cost of moving to a search engine is zero. Your current approash is simply going to drive users to your site for test drive and then they will leave because your product is inferior. More importantly they users will say,"I tried MSN search, it sucked." Here's something to remember, there has never been a Google ad on television. Your #1 competitor has never had to advertise as their product was clearly superior and word of mouth was sufficient.
The rest of the article has some great quotes - Here's the selected ones I like.
Ballmer admitted the platform "had stalled in the last 12 months"...
..."We can't support open source, but we can support interoperability,"...
...may be addressed in the next release [of SQL Server] in 18 months, Ballmer said, but conceded he "really didn't know"...
...when a participant asked why MapPoint had not expanded to South East Asia so such services could be built, Ballmer was stumped...
..."I didn't know we weren't doing well there,"...
..."In the next six months, we'll catch Google in terms of relevancy,"...
...I've never used that interface...
"Give up the fight? No, never," he said.
A large part of Microsoft's success has been it's ability to control the platform and the standards on the platform. For the longest time Windows has been the platform of choice. Microsoft recognized part of the strategic shift of the Internet and thus the necessary fight to destroy Netscape. The problem was that MS after crushing Netscape by means legal and illegal, they promptly forgot about the true strategic threat which was the rise of open standards. While one competitor was eliminated, they neglected to realize the real problem of open standards that didn't run on a platform they could control. As results, Gates disbanded the IE team after Netscapes and demise and conceded development to the world at large. The growth of standards not based on the Microsoft platform has meant that developers, instead of being tied to the MS platform (where the success of third party applications drives sales of MS licenses), are tied to the open standards and help drive adaption of open standards such as the net.
These creates several problems for Microsoft. First the "embrace and extend" approach won't necessarily work. As the platform is no longer the Windows platform, "extending" the standard simply ignores the software ecosystem outside the Microsoft "extended" standard. The existence of a substantial software ecosystem outside the Microsoft platform means that developers can succeed without having to drive sales of licenses for Microsoft. Web applications by their very nature have been developed to be browser independent.
Furthermore in an open standards environment, it's important to lead in standards development. MS is currently almost always following. MS for example just announced their AJAX framework, well after Google has lead in the area. By not leading, MS cedes the territory to Google. Developers have not interest in being tied only to the MS platform only as with a small additional expense they can assure their applications are browser independent.
MS has gotten too large and is in too many markets. Integration along product lines was simpler 10 years ago. Now MS has too many product lines and is competing in too many markets. Their future platform .NET is stalled and judging by Ballmer's responses he simply doesn't know what's going on at his own company. This may not be his fault. The company may be simply too large for any one person to know what's going on.
Finally Google understands the importance of open standards. Their Summer of Code is a brilliant example of supporting and seeding the software ecosystem outside the MS platform. Notice that MS had NO response to this program. I guess they just want to give up on the next generation of developers.
