Ballmer

The ET interview with Steve Ballmer is worth reading-

When do you see the recession ending?
Well I actually don’t think we are in a recession — I don’t use that word and I say it’s a reset. Recession some times implies going down, and coming up. I think this is a situation where the economy got to an unsustainable level based upon too high a level of borrowing, particularly by business and private individuals, and it’s sort of like all of that air has to come out and it takes a while. And the government in some sense does not want it to come up too fast because there is too much societal pain if it all comes out. So, this stimulus in some sense is designed to let air out more slowly. Instead of being over quickly, it may take longer to get over, but it’ll be less painful, which I respect. So I don’t know if it will be fully reset for another year, two years. At that point, we will get that GDP growth. GDP growth comes from four sources — population growth, productivity, innovation and debt. Too much of economic growth in the last 10 or 15 years has been from debt. Once we reset, I think the only sources of GDP growth will be productivity and innovation, and some from population…

Do you see Japan’s recent history repeating itself in the US, looking at what happened during last decade?
I hope not. Ask an economist, I am not one. The way it’s explained to me is that the Japanese did not confront some of the problems during the past decade. And then when they did, they did some unusual things. I am sure economists in US universities have studied that phenomenon, but everybody is also trying to avoid too much social pain. I hope that (a repeat of Japan) does not happen. It’s not good for any-body to have stagnation in the world’s largest economy…

Has Microsoft missed out on search innovation? You did try to create a stronger rival by attempting to acquire Yahoo, but that did not materialise?
Google has done a great job — they have built a great business, they are dominant, regulators can decide what that means. The question is: Will they face any competition, and will the search market be an area of high or low innovation? The level of innovation in any category is high when there is competition. We have competition from this funny thing called Linux, which does not even require it to be successful. We have the best and the worst of competition — we have a competitor that’s going to keep competing whether it’s successful or not because it does not require financial resources, it’s keeping our prices down.

So are there innovations to be done in search, and the answer is clearly yes. I can’t speak for Indian languages, but in English, the average search query is 2.2 words because people have learnt that if you type longer queries, you get worse answers. Is there an opportunity for innovation here? I think so. Almost half of all queries never answer somebody’s questions — so 50% of the time you don’t get what you are looking for — that’s interesting. The material that people are looking for on the internet gets broader every day, so the opportunity to be dynamic is quite large. We also think there is a lot of opportunity to invent in business models. Google did a great job of inventing a business model, but is it always going to stay the same?

Unfortunately, search is a game where being in it, it’s expensive to open the door — you have to be willing to invest in R&D to scan billions of documents on the internet. It’s not cheap, it’s like competing with Boeing in the airplane business. You can’t be a little start up….

Speaking of Google, here’s one on aesthetics vs. mechanics.

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