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Where is this giant heading? This article gives some insight:

Microsoft gives little insight into online strategy
By JESSICA MINTZ
The Associated Press

REDMOND, Wash. | Microsoft chief executive officer Steve Ballmer defended the software maker’s decision to invest heavily in its unprofitable online business.

But he shed little light Thursday on specific steps it will take to challenge Google after the failed bid to buy Yahoo.

Analysts arrived for a yearly meeting at Microsoft headquarters hoping for new details about the software maker’s online strategy following Wednesday’s news that Kevin Johnson, a key executive in Microsoft’s pursuit of Yahoo, was stepping down.

But aside from an announcement that online hangout Facebook will build Microsoft’s Live Search engine into its site, executive presentations offered more cheerleading than fresh insights.

Ballmer filled in for Johnson, president of Microsoft’s Windows and online operations since 2005, to sketch out how the software maker was thinking about investing in its online business.

Last week the company announced $500 million of additional spending for fiscal 2009, but said little about where the money would go.

Ballmer did not disclose dollar amounts. But he indicated Microsoft would focus the bulk of that investment on search technology, data center infrastructure, Web indexing and marketing, and called search the mission-critical part of the online business.

Search is “a two-horse race” between Microsoft and Google, Ballmer said, making only passing reference to Yahoo’s current position as the second-largest search and advertising provider.

The executive said Google and Microsoft were the only two with the resources to play in what he saw as a $1 trillion market.

However, Microsoft must “ante up” to get in the game, Ballmer said repeatedly, laying out investments of as much as $1.2 billion to $1.5 billion a year, including the $500 million announced a week ago.


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