Liveblog: Steve Ballmer Keynote At SMX West

Microsoft CEO Steve Ballmer makes his first address to the search marketing community today at SMX West in Santa Clara. Danny Sullivan will sit down with Ballmer for a “fireside chat” that will also include time for Q&A from members of the audience.

NOTE: Microsoft has now posted a video and a transcript of the talk.

Speaking of the audience, many of the big names in traditional media will be on hand to hear Ballmer talk about Microsoft’s progress in search. And, did I mention that the keynote conversation is being streamed live on CNBC’s Power Lunch program? It is. And if the convention center’s bandwidth can survive the throng of people who are already filling up the room, we’ll be liveblogging the whole thing right here. It’s due to start at 9:00 am PT, so stay tuned.

It’s 9:00 am and we’re off!

Danny: How is the YHOO-MSFT deal gonna help people in this room?

Steve: The search experience relies on the relevance of advertising and the Yahoo deal means more eyeballs on one campaign, which is great. From the standpoint of the user, it means more relevant ads. It also gives us more opportunity to scale.

DS: Does it also improve search results for the user?

SB: As we get more signals, it improves the relevance of search results. Uses example of a friend searching for apartments in Paris.

DS: Any gamechangers on the way?

SB: I see opportunity for a number of gamechangers. It’s important to be in the game with a differentiated point of view. From a user experience, we have a differentiated point of view. Gamechanger? I don’t know. There are more opportunities – some of that is still open. The business model of search, we think there’s some innovation to come on the business side.

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DS: Can you be number one in the US in terms of market share?

SB: There’s no good answer to this question. If you say YES, you sound arrogant. If you say NO, you sound like you’re happy with second place. No one aims to be second, SO THE ANSWER IS YES. (He’s actually yelling his replies.)

DS: Would you be happy at number two?

SB: There’s no good answer. We’ve got great long-term optimism. Tomorrow’s goal is to gain a few points, a tenth here, a tenth there, and just keep working and working.

DS: Is Yahoo gonna survive as a search player? If you want to beat Yahoo, don’t you have to kill them?

SB: No. Yahoo has a lot of flexibility under the contract, whether it’s through search experience and on the economic side. Growing search share overall is job one, but we need them to be successful with us. The number one objective is for Bing to be the number one product that it can be. There’s an advantage to having the power of two, as opposed to the power of one.

DS: Is MSFT helping push against Google with all these anti-trust issues lately?

SB: We have a blog post that people should read about this. As in our case, a lot of times initial complaints come from a competitor. We’re not being silent in this case, so we get involved – sometimes unsolicited, sometimes when we’ve been asked.

DS: What is Google doing that you think is illegal?

SB: Legal is determined by regulators. We comment when we have something to say or when we’re asked.

DS: Asks about lock-ins with Google.

SB: There are a lot of places where it’s very hard to break through. I would love it if advertisers would share with us their experiences on Google. There’s things we could do to help those advertisers on Bing, and offer them a better value.

Ballmer transitions to Google book deal. Says it gives Google a better position in the marketplace.

DS: Are you gonna jump back into the book space? You said “we don’t think it’s a business.”

SB: We’re participating at a lower-level of investment in a consortium. But to say there’s a deal that gives one player an advantage in the space doesn’t seem appropriate.

DS: What about China. If Google leaves, what does it mean for Bing?

SB: I don’t know what will happen with Google. The real force in China isn’t Google or Bing, it’s Baidu. I won’t say the Google issue is a sideshow, but if you want to play in China, you have to partner with Baidu. I don’t know what the impact will be on Bing. We’ll have to wait and see.

Danny asks about distribution deals with computer partners. Ballmer: “We’d love to have more distribution partners! We’re having all the right discussions with all the right people. For a low market-share player like us, distribution is helpful.”

DS: You’re going to be powering search on the iPhone?

SB: I read about that. “That’s sort of wild stuff.” We’ve had a lot of positive feedback on our Bing iPhone app. Other than that, I’ve read rumors. We do get a good collection of commercially-valuable queries from the iPhone.

DS: Asks about search inside Windows 7. Are you gonna give people options, or make them pay to be there?

SB: It’s more complicated than that. We’re not gonna get a huge amount of support from partners who don’t want Bing.

DS: Will we get a Bing app for Android?

SB: It’s complicated, because Android is not always Android. We’ve done Bing for Blackberry, but it’s tricky to understand where the opportunity lies for us in terms of the various Android devices.

DS: Asks about mobile opportunities.

SB: Mobile queries are just gonna keep going up and up and up. I don’t think we’ll see a drop in queries from PCs, but we’ll see a rise in mobile devices queries. Exact numbers are hard to predict. Some queries will feel similar between the two, but there’ll also be a whole new class of queries that are specific to mobile.

DS: Do you search when you’re on the move?

SB: Yes, I search too much and my wife would say that’s especially true when I’m driving. I have the phone in my car and I have to be careful about that.

DS: (missed question)

SB: The number one thing that Google benefits from in search is that they did it right first. We started later and there’s a value to incumbency. You can ascribe these things to things like culture, but it’s never clear which came first — incumbency or culture. We have a lot of great people. We got everyone moving faster, innovating more, because of Bing, so there must be something good going on.

DS: How big a portion of MSFT do you see Bing becoming?

SB: Didn’t we answer that? You asked me about market share — I don’t know when all that’s going to happen. The question is what’s going to happen to the economics of the search industry. Maybe in the future we’ll have a bigger share but less profits. “I guarantee you search will be an ever-growing share of MSFT’s profits. First we have to get to profitability.”

DS: Asks about what he’s learned about search.

SB: The dynamics of an auction-based advertising business are really interesting. The dynamics of business-model competition are fascinating, not just compared to software, but compared to anything. There’s a whole set of innovations still to come around business models that will make this more efficient for everyone – advertisers, publishers, users.

DS: How much of your time is spent on search?

SB: We’ve got 7-8 big businesses and a lot of customers. I’m generally working on the things that are at the intersection. What’s the frontier of how search should work with Office? How Bing should work with XBOX? We have people like Qi Lu who are heavily involved in search, and I get a lot of feedback from our team. I also give a lot of feedback. I’ve fallen in love with our real-time search — there’s nothing better than our Bing Twitter search.

DS: Should you buy Twitter?

SB: It’s not clear to me. We have a great partnership, and I’d hate to not have that partnership, but it’s not clear if we should buy that company. They want to be independent, so we want to have a great relationship with them.

DS: Will you join Twitter like Bill Gates recently did? You should be yelling at us on Twitter.

SB: “SELLING!!! Selling and yelling.” Steve admits he has a stealth Twitter account and has tweeted high school basketball games.

DS: What about Facebook?

SB: Again, we have a great partnership with them. That’s good for them and good for us. Great collaboration will permit the best experience for the searcher and the Facebook user.

DS: You mentioned getting feedback earlier. What’s the most recent example?

SB: KEY LIME PIE!!!!! Says he showed his wife Bing’s recent recipe search but wasn’t happy with key lime pie results. “Those results are better now.” Says his whole family are Bing evangelists and critics. “We are definitely a religiously pro-Bing family. I shoot an email to people over there and things do seem to get better.”

DS: What at Bing needs the most improvement?

SB: We’ve made some great progress. I think we’re absolutely onto the right thing when we talk about making decisions and taking action. There’s more we can do to drive that. There’s things we can do to connect with SEOs and others.

I’d also say we can improve relevance on tail queries. We’re doing a better job with freshness, but we can improve on tail queries. We also want to “take our show on the road” to other countries.

DS: What are you happiest about with Bing?

SB: I think Bing Maps is fantastic. My favorite Bing thing is this Newseum app on Bing Maps where you can see the front page of newspaper across the world.

DS: What’s the biggest opportunity in search?

SB: It ties back to this idea of action — to help people get done what they’re trying to get done. How do you understand user intent and then structure it, those are two great opportunities.

AUDIENCE Q&A

Has Cashback been a success?

SB: I would say it’s worked, but it hasn’t worked fantastically. It’s certainly had positive results. I’d expect us to continue Cashback and try some new things to make it more potent for the merchant as well as the user.

Where does MSFT see the money to be made in mobile going forward? Is it in licensing or monetization of apps, etc.?

SB: Yes. Talks about how iPhone makes money via licensing. Says he thinks there will be multiple revenue streams around the phone, including ads, subscriptions, search, licensing fees on the operating system, and more.

Follow-up about HTML5 replacing apps.

SB: HTML5 is apps. Talks about structure of how things are made.

What about Flash and Silverlight?

SB: We continue to push forward with Silverlight. We’re on about 40%-50% of all PCs out there. We support Flash right now. I think he said the next Windows Phone this Christmas won’t support Flash (but don’t hold me to do that).

Does PPC monetize on mobile? I’ve never clicked on a mobile ad.

SB: Turns out some people do, hence my surprise that we’re doing a little better on mobile monetization than I thought. In general cases, there’ll be more innovation and IQ needing to be applied to mobile ads. Sometimes an ad is the best response to your request.

Now Steve has a question for the audience. “We spend a lot of time thinking about the evolution in privacy and confidentiality from the user perspective. Different users have different privacy needs. We should all respect that. On the other hand, some people will give up some privacy for better service and better opportunity. I’m curious to know how you’re thinking about this balance?”

SB – says this issue is more in our minds post-Buzz. Give out his email address for replies: steveb@microsoft.com.

Danny asks about PPC on Bing — about half the audience raises hand saying they use it.

Danny asks for “God codes” so he can beat his kids on XBOX.

SB: “Get younger!!!!!!”

And we’re done with a very fun and interesting chat. Thanks for following along.

Related Topics: Apple | Channel: Retail | Microsoft: Bing | Microsoft: Bing Mobile | Microsoft: Bing Shopping & Cashback | Microsoft: Business Issues | Microsoft: Partnerships | Top News

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About The Author: is Editor-In-Chief of Search Engine Land. His news career includes time spent in TV, radio, and print journalism. His web career continues to include a small number of SEO and social media consulting clients, as well as regular speaking engagements at marketing events around the U.S. He recently launched a site dedicated to Google Glass called Glass Almanac and also blogs at Small Business Search Marketing. Matt can be found on Twitter at @MattMcGee and/or on Google Plus. You can read Matt's disclosures on his personal blog.

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  • Duane Forrester

    …ah, where and when Matt?

  • Duane Forrester

    I see patience is a virtue… ;)

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