Obviously biased, but I think he does have a point. Google has found an insanely profitable business in search and is using a shotgun approach to try to find another revenue source, and it had better work. Microsoft could lose Windows (to a Windows-killer - presume their apps would still run) and still be a nicely profitable company. Google without search, today, would be in deep shit. Windows has a much higher lock in than Google search does, too, and will do for the forseeable future.
I liked this bit:
Asked by a student what keeps him up at night, Ballmer said managing people and relationships and shifting business models were the biggest culprits. Still, those aren't major interruptions.
Disclaimer: I'm no accountant and maybe I'm not reading the figures correctly, but here goes.
It's closer to 61%/37% search/adsense, but look at the profit. It seems to me that for Adsense the revenue of 1,197mm this quarter had a 'Traffic Acquisition Cost' (i.e. what they pay to website owners) of 975mm, so they see very little profit from that.
Without search, this quarter, Google would have been 947mm in the red instead of 1030mm in the black. Without Adsense, which is 37% of their revenue, they'd have lost just 222mm from their bottom line.
In contrast, Microsoft's biggest earner in 2006, Office, had a revenue of 14,488mm without which they'd still be in the black by 3774mm pre tax. Which is actually far less comfortable than I expected, but Google is under much more threat from Newgle than Micorosft is from any of their competitors, present or future.
What he's really thinking is how few good people they leave for Microsoft. Nearly everyone who gets an offer from both must choose Google. So the more people Google hires each year, the lower down the list Microsoft's top recruits start.
Was it really different 5 or 10 years ago though? Microsoft hasn't been a cool company for a long time. Although I guess it was very impressive for the resume, and prior to Google, that was a choice you'd have to make.
He said hiring growth is insane. It's fair to wonder what the heck 5,000 new hires are doing in a company of 10,000. Google makes all its money from ads and there's no way they're all involved in the back-end for that. If they're sitting around building cute little javascript applications then Ballmer is most certainly correct that they're insane.
I liked this bit:
Asked by a student what keeps him up at night, Ballmer said managing people and relationships and shifting business models were the biggest culprits. Still, those aren't major interruptions.
"I actually do sleep very well," he said.
I'm sure he does.