Microsoft's chief executive officer, Steve Ballmer has said that the software giant has a long way to go to compete with Google when it comes to search and advertising.
Microsoft is attempting to break into online advertising, but Ballmer admitted at the Gartner Symposium/ITxpo in Orlando on Thursday that Microsoft was still an "aspirant" in the search and advertising fields.
"In world search and advertising, Google is the leader; we're an aspirant," said Ballmer. "We have a lot of work to do in search and advertising."
Microsoft acquired digital-advertising company Aquantive in May, and has been in the process of investing US$2 billion in its own online advertising platform.
Ballmer said that it was "expensive to do an advertising platform", but insisted that Microsoft's platform, Microsoft Digital Advertising Solutions, is viable.
"Our advertising system works," said Ballmer. "When we have something there, we'll show you."
The Microsoft chief said that the company had evolved from a desktop-software enterprise to a business that had "broadened" to include advertising and online services, as well as being an entertainment and mobile-device company.
Ballmer added that Microsoft's "software model is under attack". "We need to take control back," he said.
Aquantive itself still needs to use an external advertising agency as consultants, Ballmer admitted. "[Aquantive has] learned a lot from having an advertising agency feeding back," said the chief executive.
Gartner analyst David Smith said that Microsoft was "clearly going after the online advertising market, and advertising is Google's core market".
Smith said that the slowing of the software industry's growth "is a challenge to Microsoft", hence its need to diversify into other sectors of the IT industry.
"Open source is putting a lot of pressure on pure software companies," said Smith. "Microsoft doesn't have presence in other business--it needs pressure in the advertising market."
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