Ballmer grilled on Yahoo deal in quirky Q&A

by Elizabeth Montalbano

March 7, 2008 —

Microsoft CEO Steve
Ballmer couldn't avoid being trampled by the elephant in the room -- the company's
bid to acquire Yahoo -- during
a quirky keynote question-and-answer session at the company's MIX 08 conference
Thursday.

The first question out of interviewer Guy Kawasaki's mouth during the hour-long
interview was "what's the deal" with Microsoft's quest to purchase
the struggling Internet and online advertising company? Kawasaki was appointed
by Microsoft to grill Ballmer at the conference.

"We've made an offer," Ballmer said. "We've made an offer and
it's out there, baby."

Ballmer reiterated Microsoft's stance that the company needs Yahoo to compete
effectively against Google in online advertising, calling Microsoft the "little
engine that could" against the wildly more successful search giant. He
said search is the "killer app" for online advertising, and that advertising
and the Internet -- already a "big thing" -- is poised to be the next
"super-big thing."

"We've worked really hard to make it clear we have real commitment, real
aspirations and real tenacity about being a really serious player in the world
of search and advertising," Ballmer said.

Microsoft on Feb. 1 made an offer to purchase Yahoo for US$44.6 billion, which
Yahoo's board has rejected. Microsoft is rumored to be mounting a proxy fight
for the Internet company, but will not comment officially about the status of
the deal.

Kawasaki, a former Apple fellow and Mac evangelist who now splits his time
as a venture capitalist, author and public speaker, minced no words in his public
inquisition of Ballmer. Wielding a new MacBook Air laptop computer, he baited
Ballmer about a host of topics, including Google, problems with Windows Vista
and competition with his own former company. He also complimented the attitudes
of employees at what he calls the "new Microsoft" for being less arrogant
and far easier to work with than people he encountered at Apple.

During his questioning, Kawasaki called Google the "G-word" and teased
Ballmer when he wouldn't say the company's name in answer to a question about
it. Proving his mettle as a good sport, Ballmer chided Kawasaki for not saying
Google's name either, then countered, "I can say the name: Google, Google,
Google."

Though Ballmer did touch on some serious topics during Thursday's keynote,
the interview had many light -- and sometimes downright bizarre -- moments,
as the two men attempted to keep a professional tone during a very unconventional
interview.

At one point Kawasaki asked Ballmer if he considers Apple a "little Chihuahua
you kick away," to which Ballmer replied by barking in imitation of a little
dog. He then acknowledged that Apple has done a good job of chipping away at
Windows market share, and that Microsoft is an underdog competitor in the media-player
market against the iPod.

Kawasaki also showed off his ultra-thin MacBook Air, and Ballmer offered to
have a "bake-off" between his Toshiba notebook and the Air. He also
took the Air from Kawasaki and mimed falling to the ground because it was so
heavy.

Defending Air's absence of a DVD drive when Ballmer said it was missing "half
the features," Kawasaki said, "DVDs are so passe," to which the
grinning CEO retorted: "Tell that to your kids on a long flight, pal!"
The remark inspired Kawasaki to inform Ballmer, "I'm never going to invite
you back to MIX."

After Kawasaki had his way with Ballmer, audience members had their chance
to question the executive. Several of them also asked about Yahoo, including
how Microsoft might split up its own infrastructure and Yahoo's -- particularly
investments Yahoo has made in building its platform on PHP (Hypertext Preprocessor),
an open-source scripting technology for building dynamic Web content.

Ballmer said Microsoft would likely use services and hardware infrastructure
from both companies, including Microsoft's services that use its own ASP.NET
programming language."We will be a PHP shop as much as an ASP.NET shop
if we own Yahoo," he said.

He added that Microsoft has taken pains to make sure applications coded in
PHP run well on its recently released Windows Server 2008 platform, though he
said that Microsoft has no plans to replace all of Yahoo's infrastructure with
Windows Server if it takes over the company.

However, not all services from both companies are likely to survive. "We
shouldn’t have two of everything. It won’t makes sense to have two
search services, two advertising services, two mail services," Ballmer
said. "Some will undoubtedly come from the Microsoft side, some will come
from the Yahoo side."

Ballmer even did a brief reprise of his famous "Developers" rant
-- immortalized
in a YouTube video showing the sweaty Ballmer repeatedly chanting the word
"developers" on stage while pumping his fist during a keynote address
-- when an audience member asked if he would "show some love" for
Web developers.

"I've been in [public relations] mode this whole time, and you want me
to get up right now and show some love?" Ballmer bellowed, rising from
his chair. He moved to the edge of the stage, stood up to his full height before
the audience and hollered, "Web developers, Web developers, Web developers,
Web developers!" before returning to his chair and previously restrained
demeanor.

IDG News Service