CEO: Microsoft-Yahoo Will Bring Competition to Media Business

WASHINGTON, June 3 – Microsoft CEO Steve Ballmer said Tuesday that his company’s attempt to acquire Yahoo was an effort to bring greater competition to the media business and the advertising industry.

“We are trying to give good competition to the market leader in that category,” Ballmer said about Google, his voice rising to a pitch as he addressed a question about changes in the market for online advertising.

“What about this Yahoo thing?” Ballmer asked rhetorically, referring to Microsoft’s continued quest for an aliance or acquisition of Web portal Yahoo

“The fundamental driver [is that] we are aiming to accelerate our move to get scale in online advertising. We think that this will be an important part of how the media business shakes out,” Ballmer said.

Ballmer, speaking at the annual gala dinner of the electronics association AeA, framed the Redmond, Wash.-based software company’s strategic moves vis-a-vis Google — which opposes a Microsoft-Yahoo combination — as a task to which ingenious software should be applied.

He criticized Google for failing to innovate — “search technology hasn’t changed a lot over five years” — and said that software was needed to empower better searches.

Better software will in turn enhance the sale of advertising, which is, he said “a good part of the media business.”

“At the end of the day, if there is good competition, the media producers will get paid a fair return from advertising on their site,” Ballmer said. “If there is not good competition, they will end up having to think about that in a different way.”

However the Yahoo maneuvering turn out, Ballmer left little doubt that the Internet had turned “the media and the advertising that supports it” on its head.

Ballmer also touted the continued progress of Moore’s Law, the technological maxim which says that computing power doubles every 18 months to two years. Moore’s law is name after Gordon Moore, the co-founder of Silicon Valley microprocessing giant Intel. Technological progress will continue to bring faster processing, better digital storage, more flexible display technologies and faster wireless connectivity.

“We don’t exactly take [wireless broadband networks everywhere] for granted right now, but we are getting very close,” said Ballmer. He recounted how, on a recent trip to the African nation of Burkina Faso, he was “browsing the ‘Net, the same way over wireless as if in Seattle.”