Microsoft CEO Steve Ballmer was in Japan to promote Windows Live services and was asked about competition from Google and Android. According to this article in the International Herald Tribune, he acknowledged that Google was “ahead” of Microsoft in search. (It’s not clear whether that includes online advertising as well.)

Ballmer went on to dismiss Android as “just words on paper” so far. He also said that he expected to continue to lose money on Microsoft’s online business for some time. The company is “in an investment mode,” Ballmer was quoted as saying. But given Microsoft’s recent $13.7 billion quarter, the company can afford to subsidize its online efforts for a long time to come.

Postscript From Danny: Be sure to see Microsoft court filing touts Google’s ‘rapid success’ from News.com yesterday, where Microsoft in court documents praises Google as being a strong competitor in the “software industry” in efforts to ensure Microsoft anti-trust provisions aren’t extended.

Related Topics: Microsoft: Business Issues

About The Author: Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog Screenwerk, about SoLoMo issues and connecting the dots between online and offline. He also posts at Internet2Go, which is focused on the mobile Internet. Follow him @gsterling. See more articles by Greg Sterling