March 2, 2010
Steve Ballmer Speaks at SMX West!
In a few minutes, Microsoft CEO Steve Ballmer will take the stage in Santa Clara California at SMX West. I'm watching the live feed provided by our friends at WebProNews. Running from today (March2) till March 4th, Search Marketing Expo West is one of the eight annual major search marketing conference and trade shows thrown by Third Door Media. Third Door co-founder Danny Sullivan is about to conduct a live conversational interview with Steve Ballmer. Danny is one of the best known and most respected voices of the search community and one of the first to popularize search engine marketing in it's earliest days. Having Steve Ballmer as a keynote interview is a great coup for Danny and SMX. Promptly at 9:00am pacific time, Danny Sullivan and Steve Ballmer are quickly introduced. The following is a rough play by play of the conversation. Danny asks about the deal with Yahoo and the time lines. Ballmer says, Quality from advertiser and user experience depends on relevance of advertising and density of bids. The ability to put together Yahoo and Microsoft's volumes is absolutely fantastic for both parties. More eyeballs on one campaign, for those here and more relevant ads for users. There is a huge advantage to scale - good for SEOs Danny Will greater volumes will improve results for searchers? Ballmer As we get more signals, we'll do a better job providing results. Here's an example. Danny Have not had big game changer in search in a while. We've seen big shifts in market share but no game changer. Is there something else out there? Ballmer There are a number of potential game changers. It is important to be in game with forward momentum and with a differentiated point of view. Total game changer? Ahhh... we'll get there. We're finding opportunities for game changers. Will continue to make positive progress. We have not figured out how to remake the business model of search but we think there is a lot of innovation and game changing on search side. Danny Can you be #1 in US? Ballmer There is no good answer to that question. If you say YES, you sound arrogant. If you say NO, you have no faith so the answer has to be YES, someday. No one does things with goal of being second but a fair amount of realism is required about the state of things. It is competitive market. Level of competition in search has ramped up in last few years. Good for advertisers, searchers, users... Danny Would you be happy as #2? Ballmer Again no good answer... We have great optimism. We'll keep working on it Danny On the way to being #1.... is Yahoo going to survive as a search player? Ballmer For us, the goal has got to be to expand the total amount of searches on our platform. Job 1. We want Yahoo to do a good job of that and we want to do a good job on that. We have given Yahoo a lot of leeway on how to do it. They have a good sense of economics but growing overall search share is job 1 and we need them to be successful with us. Danny But you're going to be doing the same thing as them so if you want to be successful in the .... Ballmer There are several paths in front of us. There is an advantage to having the power of two as opposed to power of one so I am excited about the partnership as a partnership. Danny A WSJ article puts Microsoft behind anti-trust complaints against Google... Ballmer We have issued a blog post that is pretty open about our issues. There are several items of interest and it is well outlined on at the Microsoft public policy blog. As in our case, a lot times initial complaints come from competitors. We're not being silent in this game. Danny In that post, it says "Google's practices...." You don't think they're doing stuff that's legal? What are those things? Ballmer Legal is divined by regulators, not Microsoft. We comment when we have users, publishers and advertisers when they share things with us. Danny Is anyone out there frustrated with Google [ONE HAND GOES UP, laughter in room] Danny The post mentions concern Google has a lock-in on publishers making it hard for Microsoft. What lock-in? Ballmer There are a number of things. I don't want to itemize as there is a lot of nuances. There is a lot of places where it is hard to break through. There's nothing wrong with a strong position. The book deal, as an example, takes someone with a strong position and gives them a stronger position than anyone else in the space. Danny You jumping back into books though you left it two years ago? Now we're concerned from a business standpoint but you didn't think it was a business then. Ballmer We're participating in a consortium albeit at a lower investment. But one guy got a special deal on scanning books. The world would want a level playing field and one that is appropriate with proper paying to authors and publishers. Danny Google China. what does that mean for Bing? Ballmer Don't know what is happening with Google. The real force in China is not Bing or Google but Baidu. Google isn't the side-show. To be #1 competitor, you need to compete or partner effectively with Baidu. Nothing has changed with Google search in China. not sure if it will change. Danny Distribution Deals. Firefox doesn't have you.... are you going to yell at them? Ballmer I FIND WHEN SELLING TO SOMEONE YELLING DOESN'T WORK! [Laughter] Danny About Bing powering search on iPhone... Ballmer I was in Europe reading about it when a journalist had asked me about it. Weird how rumors fly. Danny You doing it? Ballmer That's wild stuff. What we want to do is have a good Bing app on the iPhone. Other than that, I've read rumors. We're going to continue to do good job with Bing for iPhone Danny Did success of iPhone Bing app surprise you? Ballmer No. we knew we would get a lot of curiosity and that feeds things. It is free and that's the right price tag. Danny There was one report that queries from iPhone are in excess of those from Verizon where you have a commercial deal. Ballmer iPhone does deliver a lot but some of the most valuable commercial queries are less likely to be oone from phone but number of queries are huge. Danny Bing app for Android? Ballmer It's ab it more complicated as Android is not Android is not Android. We have Bing for Blackberry and for iPHone. It is tricky to understand where the market opportunities are for us with Android Danny How do you see mobile in relation to the search space? Is it the year of mobile. Ballmer It is A year for mobile. The number of mobile queries will increase. Not predicting a drop in queries from PC but we'll see a rise overall. For most people in 3 yrs, most people probably won't see much difference between platforms though some will be mobile specific. Ballmer It's a new market. The only thing Google benefited from in search is they did it right first. We started later. the other guy had a... there is value in incumbency... We have a value in incumbency in some of the things we've done.... Danny How big a chunk of Microsoft do you see search becoming? Ballmer Didn't we answer that question earlier? There is no right answer. I don't know how long it takes. I don't know if I'll be in my 50's, 60's. ... truth is, we have ambitions to grow. What is the economics of search in the future? The dynamics of an advertiser supported business are really fantastically interesting. There is something simple to "I build X, sell it, you give me money for it"... "Now, I'm doing something for you, you pay for it, I can't cut my price for you because it is auction bid so the dynamics of business model competition is fascinating. There is still a whole set of innovations around business model that will make it more efficient for publishing, advertising and users. Danny What is your time like? You do a lot of search Ballmer Take a look at the profile of Microsoft's businesses. We have seven big businesses. I am generally working at things that are at the intersection. What is the next frontier between search and Office, between Bing and Xbox, and what we're trying to do with TV? When it gets time to drive the search team, we have people doing that. I give a lot of feedback. I am falling in love with our real time search. Danny You mention Twitter. Buy them, should you buy them. They have all that beautiful data. Shouldn't you own them? Balmmer Not clear to me. I would hate to NOT have the partnership. if we need to own the company is unclear to me. as an independent, they have credibility. would htey have that credibility if they were captive., not sure. Danny You going to get on Twitter, I think you should be Yelling at us via Twitter. selling and yelling Balmer the truth is, not terribly much. the things I want to say broadly I am likely to say in a web page than in a series of short tweets. I am a much more of a consumer than author in real time search. Danny So you have a steath account and we just don't know where it is? Ballmer Of course. Ballmer on Bing Loyalty: We are a religiously PRO BING family. no BLAH BLAH BLAH users. My dad worked at Ford for 30years, I still drive a Lincoln. I hope my kids 50yrs from now will still use a BING Danny What needs most improvement Ballmer We've done a lot of great stuff in user experience that we need to consolidate. we're onto right thing when we talk about making decisions and taking action. How do we dive that? Build relationships with SEOs... we're on the right wave length. Great opportunities to improve relevance, particularly on 'tail queries'. then we have to take show on road, we're in UK, and Canada and a few other countries... we want to expand over the next few years. Bing maps are fantastic. Danny What is the biggest opportunity in search? ballmer It ties back to this notion of action. Help people get done what they want to get done. Ballmer asks the audience: How should we think about evolution in privacy and confidentiality from POV of user. My belief is we should build around user needs. Some will give up privacy for better service. From this audience's perspective, I am curious to know if this is a major issue on people's minds. If so, I'd love to hear how folks are thinking about the issue. Drawing few responses, he gives his email address and asks for opinions. firstname.lastname@example.org