While Google is currently celebrating its tenth birthday with an unprecedented charity event and keeps rolling out new features every day — the latest being Google Moderator, a tool that applies Digg-like rankings to meetings, allowing attendees to vote on what questions will be asked — Steve Ballmer, Microsoft CEO, spoke yesterday about the future of Microsoft and how they will focus on the competition against Google in the next few years.

Even though Microsoft's earning figures are substantially higher (an estimated $60 billion against Google's $16.5), the Mountain View company has consistently experienced a fast growth since its inception, and is now rapidly evolving from search engine and advertising platform to new and highly competitive markets, such as that of Internet browsers (Google Chrome) and mobile telephony (Android, G1).

This, of course, represents a tangible danger even for an established company such as Microsoft, which saw its search engine market share drop significantly despite its undiscussed lead as an operating system provider. But if the Redmond-based company is to fight the "big G" effectively, it first needs to figure out an effective way to do so.

During a dinner at the Churchill Club in Silicon Valley, Ballmer talked about the need to reinvent the search engine business from the ground up, including its business model. The CEO is committed to invest a great deal of time and money to improve the position of the company in the search engine market. "It's a five-year task", he commented, as a follow-up to the recent statement tha
t Microsoft was ready to lose 5 to 10 percent of operating income for several years to achieve its goals.

To this regard, the secretive Microsoft's cloud computing initiative dubbed "Project red dog" will be discussed next month at the Microsoft Professional Developer Conference. Ballmer also made it clear that the company will be soon working on server virtualization, competing with the current market leader WMware, which was criticized because of its high prices.

As for mobile computing, the CEO maintains that Nokia, Apple and the other main players in the smartphone industry don't represent a threat to the company as their software is strictly tied to the hardware, which inherently brings compatibility issues. The real battle, Ballmer added, will be between software platforms that can be run on different hardware, such as Symbian OS, mobile versions of GNU/Linux, and Windows Mobile.

Apple, while acknowledged as a worthy opponent and a possible threat to the company in the long term, is however thought to adopt a dubious strategy in wanting to tie the software to the hardware, without licensing its software to any third parties.

According to his analysis, Microsoft's two weakest points are high-performance — mainly due to compatibility issues on a wide array of hardware — and Web server applications, where the company's share is estimated at around 40% against Linux's 60%.

In conclusion, while Ballmer admits there is certainly some work to do, the overall condition of Microsoft is an enviable one, with all the tools and financial resources to be able to fight the Google dominance in the search market in the years to come.

(source: PC World)