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By Ina Fried, 26 September 2008 08:18

NEWS

Microsoft CEO Steve Ballmer said his company may be the only one with a chance to rival Google in search over the long term but acknowledged it will take several more years and a whole lot of money.

During a speech at the Churchill Club, Silicon Valley's business and technology forum, he said: "It's going to take us a while. We've got a lot to do."

Venture capitalist Ann Winblad, who was moderating the talk with Ballmer, noted that when Ballmer addressed the club in 2006, he said search was a five-year battle.

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To succeed, he said, the company will have to find a way to fundamentally change the experience and the economics of search. "You have to redefine the category," Ballmer said. "We've taken some steps in that direction."

He said: "You don't really brute force your way into any market."

On the antitrust front, Winblad asked Ballmer if he had any advice for Google's executives. "I'd probably keep that advice to myself," he said.

He also stayed silent on several other topics, such as a question about "Red Dog", the company's rumoured competitor to Amazon's EC2. He did promise Microsoft would have much more to say in six weeks at the company's Professional Developer Conference in Los Angeles.

He did say that Red Dog and other cloud computing efforts are key to winning the battle for developers, particularly web developers.

Ballmer said: "I think at the end of the day, cloud computing will be dictated by the interests and the degree to which you capture the imagination of developers."

When asked about the phone business, Ballmer said in five to 10 years a billion mobile phones sold per year will be smart phones. He said that means software and hardware are likely to separate, at least in the mass market. Ballmer added, of the players in that area - Windows Mobile, Symbian, Linux mobile and Android - Microsoft's is the most mature.

According to Ballmer RIM and Apple may have nice and profitable businesses but they are likely to be niches. "We're kind of battling for the big part," Ballmer said. "That doesn't mean Apple and RIM wont make lots of money."

When asked about Windows, he said: "Every version of Windows statistically...gets better than versions before. I'm not saying that we are there yet."

With Vista, Ballmer said Microsoft made a choice, right or wrong, to change some things that caused compatibility issues in the name of security.

He said that it would be easier if Microsoft was trying to build a fixed-function device rather than an open, general-purpose platform. Still, he said, the goal is a system that everyone likes. "Every day we've got 5,000 people...that come to work just focused on that single challenge."