Why Microsoft Continues to Chase Internet Search

By Saul Hansell

Ruth Fremson/The New York Times Steve Ballmer, chief executive of Microsoft.

If you are making something that is growing and profitable, why throw billions at something else that has kept losing money and market share?

That was the last question I had for Steve Ballmer, the chief executive of Microsoft, when he came by The Times on Thursday. I wrote earlier about most of our conversation, which was about the company’s plans to offer computing services from its network of data centers to corporate customers. While I wondered about the complexity of Microsoft’s software design, it has the advantage of a strong position in the corporate software market, which it won over the last 10 years.

But I asked Mr. Ballmer, why bother with trying to catch up to Google in search when it looks as if the enterprise market has much better potential return given the risk?

He flatly rejected the premise of the question.

“I don’t feel like I have to make the choice whether to do foo or to do bar,” he said, using the language of computer jocks of a certain generation. (Wikipedia traces the word “foobar,” meaning “placeholder,” to the Digital Equipment Corporation in the 1970s.)

Mr. Ballmer wants to be in search because that’s where the money is.

“At the end of the day, one of the key lessons is that not all businesses on the Internet are good businesses,” he said. Microsoft, he pointed out, dominates instant messaging in Europe, but that popularity hasn’t turned into much profit.

“There are only three things on the Internet that have made money: Amazon, eBay and Google,” he said. “If we’re going to make a lot of money on the Internet, we’ll have to challenge Google in search.”

Mr. Ballmer added that when individuals use Microsoft products, it helps sales to business.

“Getting people hooked on using Office in a collaborative mode at home is super-important to getting them to use it that way at work,” he said. “If you lose the consumer, you lose the enterprise.”

How’s that for putting even more pressure on the team trying, yet again, to come up with a search engine that people actually want to use?

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