What does Ballmer worry about? "Google, Google, Google"

Turning to search, that's obviously a key area for Microsoft. You announced a couple of partnership deals that will get you some more distribution, but clearly there aren't enough distribution deals out there to make the kind of headway you need to make against Google. What else does Microsoft need to really be a serious competitor to Google?
Just keep working. I mean, look, this is not something that changes overnight. Everybody wants us to snap our fingers. We have a good competitor, and yet at the same time, we see real opportunities to improve the search experience, to differentiate, but it's not going to happen overnight. We're going to have to keep working and working; innovating product-wise, marketing, branding, distribution, and we're going to have to be patient about it.

I like our new release. We're making two releases a year. We continue to attract great talent, which lets us do interesting things. Our cash-back programme has some early promise in terms of what I call business model differentiation versus Google but we'll continue to work.

Fair to say four years in, though, you would have hoped you'd made more progress in market share?
Maybe. Maybe. I'm not sure that would have been anything other than naive because the market leader is a strong company. And we're going to have to keep at it.

You have said that while you're not interested in buying all of Yahoo!, you would be open to some sort of a search deal. How likely do you think that is?
No way to handicap it. I think at this stage, it's probably fair to say I'm not even sure Yahoo! would handicap it. They're out doing a search for a new CEO and we'll just have to wait and see how all that shakes out.

You said a little while ago that there weren't any active discussions, is that still the case?
Yeah. I think it's probably fair for us not to comment too much.

We've talked about Google, we've talked about the economy. Which actually occupies more of your time in terms of which do you spend your time worrying about?
Well in general, the answer is: Google, Google, Google, Google, Google. Now, the truth of the matter is, for a period of time of a couple of months, we do have to go through and say, OK, what do we really think this economic thing is, is it a year thing or is it a reset, and then we build from a new base, and how do we parse and act on the consequences?

So there's a little bubble period in here where I'd say I'm spending a little bit more time. But in general, I can't control the economy. We can drive and control and affect our competitive position, so the lion's share of my energy would be there.

Microsoft, in the past, has been able to get through even some, you know, typical economic downturns by kind of trimming at the edges. Is it fair to say that whatever you have to do this time, it'll be more significant than anything you've had to do before?
It's premature to comment. I mean, the fact of the matter is, this is not a downturn, this is a bit of a reset. Those are quite different and we're trying to really suss through what we think that means for us.

One of the biggest changes coming in the Office side of things is the fact that individuals and companies will soon be able to access Office over the web. What doors does that open?
There's two aspects: One aspect is sort of the notion of 'can I get access to the software when I'm not at my own computer', and you'll get access to some stuff when you're not at your own computer. That's nice. People want the full capabilities, generally.

The second thing is: do we provide better and better facilities for people to collaborate from within the productivity environment? And I think that's a bigger deal, and you'll see us do both of those - push both of those themes in the new Office release.

It's been few months since Bill Gates switched from full-time work to working with the foundation. Any surprises in terms of what that's meant or what has it meant in terms of changes for Microsoft?
I don't think anything all that surprising. I think we're trying to get settled now in a rhythm. Bill and I see each other, you know, we have a regularly scheduled lunch, there's board meetings, he has a regularly scheduled meeting with a couple of the internal groups. I think he's figuring out how he spends his time. But I don't think any real surprises.

In terms of the economy and what that means, what are the kinds of things that are least impacted inside Microsoft and what are the kinds of things that do pretty well?
You mean what'll sell and what won't sell? I think PCs are going to sell a little less well, which means Windows will sell a little less well.

I think servers - because capital spending will get hit, servers will sell a little less well. Now, we are still taking share in the server business overall, so I don't know what that'll mean for our overall results. Phones, web, those things ought to all be growth opportunities for us.

Original article: Ballmer: Google, Google, the economy, Google from CNET News.com