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Ballmer Happy With Bing's Progress

Bing and Steve Ballmer
Photos: Microsoft
SANTA CLARA, Calif. -- Microsoft CEO Steve Ballmer is excited about his company's Bing search engine and its aggressive search strategy. But it can be hard to measure that enthusiasm since he's almost always in sales mode when talking about anything related to Microsoft (NASDAQ: MSFT).

So it's worth taking note when Ballmer restrains himself, as he did occasionally during a Q&A keynote here at the Search Marketing Expo here Tuesday morning.

For example, when asked about the success and future of the Bing Cashback program, Ballmer was guardedly optimistic. Cashback rewards registered users when they buy certain items found using the Bing search engine.

"It's been interesting. I would say it has worked. It hasn't worked fantastically and changed the economic structure of the business, but it's had positive results," Ballmer said. "I expect us to continue and rethink it, morph it and try some new things around the Cashback concept so it becomes more potent for the user as well as the merchant."

On the flip side, Ballmer said the thing he's most excited about is Bing Maps.

"Bing Maps is fantastic -- it's one of my favorite things," Ballmer said, though he also said he enjoys a Bing feature that enables users to flip through the front pages of hundreds of newspapers worldwide and even get translations of their text.

Microsoft has been forced to play the role of underdog in search, spending tens of millions on ad campaigns, research and partnerships in its battle with the dominant search provider, Google (NASDAQ: GOOG). While Bing is still in third place behind Google and Yahoo (NASDAQ: YHOO), the company has made progress, finally achieving a double-digit share of the search market.

Ballmer admitted the company doesn't have as much experience as Google and Yahoo in the market, but said it understands what needs to be done.

For instance, he said Microsoft made the right move in striking its partnership with Yahoo to run its search infrastructure in return for a cut of Yahoo's search ad revenue.

"I think we've done a lot of great stuff in the user experience area and I think we're absolutely right about making decisions and taking actions," he said.

Microsoft markets Bing as a "decision engine" that provides the answers and actions people are looking for, rather than just providing millions of search results that require more digging -- and clicking -- before becoming truly helpful.

Still, all the major search engines have been marketing their effectiveness in similar ways, with features like integrated maps and formatted page content long appearing within the search results on, say, Google. Meanwhile, startups like Wolfram Alpha aim to go one step further, specializing in providing a wealth of rich data directly on the search results page.

Yet Ballmer still sees this as one area where challenges -- and opportunities -- remain, adding that he'd like to see more advances on user interface and more understanding of user intent.

For instance, he recalled wanting to get some information on the country's budget and the debt ratio from a search engine.

"I knew what I wanted and I could write the spreadsheet myself, but what I really wanted was for the search engine to give me the answer and put it in a spreadsheet for me," Ballmer said.

Another example he pointed to is the debate over health care. "How does the money get spent? You can find it all there -- blue link, blue link, blue link. It should all be assembled for you," he said.

Ballmer talks real-time search and Twitter acquisition prospects

The major players in search have also been moving to better outfit their results with real-time information. In particular, microblogging service Twitter has proven a popular partner: Like Google and Yahoo, Microsoft has a deal with Twitter to get access to the microblogging service's real-time feeds that now appear in Bing results.

Asked if Microsoft would buy Twitter outright -- a perennial question -- Ballmer didn't discount the idea.

"We have a great partnership. Whether we need to own the company is not clear. As an independent company, they have a lot of credibility with the user community. Would they still have that if they were captive? That's not clear."

Ballmer also said he's more a consumer of Twitter than a proactive user, but admitted to have stealth account so he can send out score updates to other parents of kids on his son's high school basketball team.

Mobile licensing fees to stay

Asked about competing with Google's free Android operating system for mobile, Ballmer said Microsoft doesn't intend to stop charging for its mobile operating system.

"How does Apple make money? There's a licensing fee on its own phone. We happen to split that with phone manufacturers," he said.

But he also said Microsoft is counting on multiple revenue streams, including ad revenue from search ads.