Speaking at the Web 2.0 Summit held in San Francisco last week, Ballmer said Microsoft would not be actively pursuing mega-deals, but rather it is driving in an independent direction.
Ballmer did not elaborate on what types of technologies it hopes to acquire, only to say that they would be good acquisitions and of strategic importance.
He did not rule out large deals. If at some point it makes sense, maybe then it makes sense. But that’s not where we are going, he said.
Earlier, he spoke about Google’s relative inexperience in search compared to Google. He said Microsoft was like a basketball rookie up against an older, taller rival in Google.
Microsoft’s current $23bn cash pile has spurred rumors recently that it is trying to buy Yahoo or Facebook. The Wall Street Journal last month reported that Microsoft approached Facebook seeking to invest between $300m and $500m for a steak in the company. Ballmer declined to comment on any such proposition, when asked by an audience member.
When asked if Yahoo would be a potential buy-out target for the company, in order to grow its search business, Ballmer said, We believe in our independent path.
He also said the company’s online advertising business was key, and that its Windows Live search engine would help grow that business.
Our View
It is fishy that Ballmer gave no insight whatsoever into the broad technology strategy that is spurring the need for all these acquisitions. Presumably, given he was speaking at a Web 2.0 event, the company wants to beef up its, er, Web 2.0 capabilities. Does Ballmer not yet know what products and services the company is working toward to remain competitive?
While it would be unreasonable to expect Ballmer to know what types of technologies Microsoft would be looking to integrate in three or four or five years’ time, it seems implausible he doesn’t have a plan for the types of technology it hopes to acquire in the next year or two. Then why throw out an acquisition plan alone without mention of what the technological goal would be?
Perhaps Ballmer was merely trying to squash speculation that he has a new strategy to grow Microsoft via mega-deals rather its usual method of buying smaller companies, following its $6bn purchase of online ad outfit aQuantive earlier this year.
