We know Microsoft CEO Steve Ballmer has a penchant for saying the darndest things. Just back in November, he stated:

“I don’t really understand their strategy. Maybe somebody else does. If I went to my shareholder meeting, my analyst meeting, and said: ‘Hey, we’ve just launched a new product that has no revenue model!’… I’m not sure that my investors would take that very well. But that’s kind of what Google’s telling their investors about Android,”

 

And since at the time Google didn't defend itself, we said:

Though he is technically right and that Google doesn’t make money on Android alone, he seems to be missing the point. Android serves as an extension of Google’s services which all point back to search which all point back to ad revenue which all lead to money. Google’s logic? If more people use Android, more people use Google, and more money for us. So we’ll give Android away, heck, they’ll let anyone use and tinker with it. Makes sense here.

 

And after waiting a good 3 months for Google to defend itself on its business model for Android stating:

"As the internet grows, so does Google benefit from potential growth," he continued. "I think our business model has proven that it works well so far."

 

So I guess Google agrees with us: any way to improve the Internet experience, be it on a mobile device or a PC will somehow trickle down and help Google's bottom line. We think that's as good a strategy as any. What do you guys think?

[ZDNet via modmyGphone]

 
There are 22 comments

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Rick Falls says:

Ballmer is right, except that as convoluded as it sounds Google has manged to generate some serious earnings in spite of not being clear about how.

As Microsoft has grown google became the new kid on the block an they have acted nimbly and then responded to where the chips fell.

I prefer my simple teeny tiny "membership business model" over the former little guys who have become corporate GIANTS !

LukasFT says:

Google is bigger or at least near as big as Microsoft

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LukasFT says:

Best strategy ever :)

ChromeJob says:

I think it's always in Ballmer's self-interest to pooh-pooh open source initiatives. Translation: "It's not greedy, exclusive, and tied directly to our bottom line, so I don't get it."

The longer he uses this, the less reasoned it sounds. Today, he sounds like a 50-something dad trying to understand his 14-year-old's penchant for sexting. "I don't get it, I just don't get it." It's okay, Daddy Ballmer, you don't have to get it. Just pay the bill."

ScottJ says:

I understand why teens sext. I'm in my early forties but remember clearly what it was like to be a horny teen. However, "paying the bill" when it comes to sexting could be appearing complicit with the distribution of child pornography. It's not a generation gap problem. It's a maturity, wisdom, and discretion problem.

TenshiNo says:

Regardless of what we "think", I think Google's reported $9 billion net revenue reported last year kinda says it all.

Parker Clack says:

He didn't "get" Linux either.

Google is working on the classic "Gillette" model or loss leader. Give 'em one thing to draw you into their real money maker.

plunder says:

It always surprised me that someone like Bill Gates decided to work with this man. I mean. Woz got Steve Jobs FFS - so Microsoft should have died from that mistake alone. He presents as a PR clown, with opinions to match. Then he acts like Zaphod Beeblebrox or Jeremy Clarkson pulling faces; but lacks the charm required to pull it off. On the few occasions I have seen him behaving like a serious Adult he looks much more credible. It's time he grew up.

Naturally he tries to put Android down, WP8 remains a minority product even with superb Nokia hardware behind it (at great prices). As an OS WP8 has a lot to offer.

In the main these comments makes me sad that Google don't work 20% harder to streamline the core of Android properly and utterly dominate Mobile. It may be more than a hobby to Google, but do they actually CARE about it in the way Apple, Microsoft and Blackberry clearly do about their OS?

poglad says:

Some very good points. I think we're at a turning point in mobile right now, and nobody seems quite ready to make the push that's required. Apple will have nothing to show for months, Google's point upgrade of Android is bound to lack the revolutionary kick that would seal the deal, and WP8 is being ridiculed to death thanks to Ballmer. You would almost think they have some kind of secret deal going on, agreeing not to rock the boat too much.

Faye Kane says:

==-

> As an OS WP8 has a lot to offer.

Surely you jest! What does it have to offer over Android?

> makes me sad that Google don't work 20% harder to streamline the core of Android

Streamline? NO sufficiently advanced technology (particularly an o/s) is ever "fast enough". And fast enough for WHAT? Dude, if you want to play 3D games on your telephone, buy a faster CPU.

--faye kane ♀ girl brain

ScottJ says:

Streamlining the OS has nothing to do with playing 3D games.

Faye Kane says:

==-
> “I don’t really understand their strategy"

Ballmer doesn't understand the entire computer business. He's a goofy, incompetent marketing major frat boy who rode Gates and the new technology to wealth, with him as the ham-handed marketing skutz. Yet he thinks all (or any) of Microsoft's success is due to him.

Now that he took over MS, the chickens have come to roost, and for the first time in my life, I get to watch an incompetent, arrogant management asshole get just exactly what he deserves.

-- faye kane ♀ girl brain

rserda says:

PREACH IT!!!! :P

Ballmer has managed to suck whatever dignity and respect Bill Gates had managed to develop within MS... as a business and innovator in the PC world.

This guy is nothing more than a classic carnival barker pushing some bizarre freak show/oddity 6-assed monkey ruse for all to see!?!?

no respect for Ballmer whatsoever and I truly question Gates decision of leaving him at the helm...?!??! don't quite understand that play, Bill...?!

I mean.. "a picture is worth a thousand words..."

ScottJ says:

Ballmer is Cheney to Gates' GWB. Both Gates and Ballmer share a tech worldview that involves closed software and strong-arming via monopoly power. The difference is that Gates wants to be appear to be the nice guy. He always let Ballmer take the heat as the a-hole. You could think of Gates and Ballmer as a duality, like Golem. Both have sinister aims. Only one seems to be somewhat conflicted about it.

Nathend says:

" ==-
> “I don’t really understand their strategy"

Ballmer doesn't understand the entire computer business. He's a goofy, incompetent marketing major frat boy who rode Gates and the new technology to wealth, with him as the ham-handed marketing skutz. Yet he thinks all (or any) of Microsoft's success is due to him. "

Amen to that !

W H A T A J O K E ! He is. Seriously. Well said. :)

Tom Garner says:

As much as I think Ballmar is a subpar CEO I tend to agree with him. The question I ask is if Google hadn't spent all that money to develop and maintain Android where would they be?

They would still be Apple's BFF and ever other OEM out there. Even after all the bad blood between Google and Apple they are still first up on any iOS or even OSX browser.

As Ballmar says, and I can't believe I am agreeing with him, if I were a Google shareholder I would be extremely upset that Google and waisted all this time and money on something they didn't need to. The internet growth which the article mentions as the reason for their success isn't due to Android. People would are going to be online if there's an Android or not.

That being said, the competition for Apple in the marketspace is good for consumers and in the long run I guess that's a good thing. Just too bad that it's coming at the cost of Google shareholders.

That's the thing. The majority of voting shareholders(larry, Sergi and Eric) do think its the best thing for the company. People are online because there are cheap effective smartphones running android. Where would the smart phone industry be if not for Android? the same as the PC market but in reverse with apple using its monopoly powers to try and crush innovation.

People seem to forget that Google is still at it's core, an advertising company. The more people use their products, the more advertisements they can sell for their products. The less invasive their ads are to the experience of the products, the less likely their users will rebel against them and the better their products are, the more likely people will tolerate ads while using them.

I don't know about Microsoft or anyone else but it seems to me like Google's strategy not only works well but it's a beautiful compliment to small business owners who benefit from cheap advertisement, users who benefit from great products, and Google who rakes in revenue while maintaining a largely positive reputation. I can't really see any major drawbacks.

Nathend says:

" “I don’t really understand their strategy. " LOL Of course he doesn't.

He did not the Iphone either. Or the Ipod ( Zune anyone ? )

Hell he doesn't understand much.

This man is lost beyond words. MS has finally had enough of Mr Steve Ballmer hence his early retirement.