Microsoft’s Google Obsession, MicroHoo’s Asian Outlook, And Competing For Digg

Microsoft CEO Steve Ballmer is perhaps showing signs of a mildly unhealthy obsession with rival Google. At Microsoft’s MIX08 online technology conference in Las Vegas yesterday, he told interviewer Guy Kawasaki in a question and answer session that he was going to continue to chase Google in search even if it costs him his “last breath”: “So it may be my last breath at Microsoft, but we’re going to be there, working away, building share.”

There’s no evidence so far that Google Docs has eaten into the Microsoft Office franchise, though over time that could change. And Microsoft’s quarterly software revenues are roughly three times Google’s online ad revenues. But Microsoft continues to behave as if it’s locked in a life and death battle with Google. And perhaps it’s because the company has been so dominant in its markets it hasn’t faced a competitor like Google for many years — if ever.

Said Ballmer, “In online, yeah, it’s Google, Google, Google and we’re in the game. We’re just the little engine that could.”

One market where that moniker wouldn’t apply is Asia. A Microsoft-Yahoo combination would be a formidable and even dominant competitor in several countries there. Microsoft would benefit from Yahoo’s strong presence in China through Alibaba, and in Japan through Yahoo Japan, which is the top search engine (41 percent owned by Softbank).

Beyond search, Microsoft and Google appear to be competing on another front: for social news site Digg. TechCrunch is reporting that Google and Microsoft, as well as a couple of traditional media companies, are preparing bids to acquire the site. The potential acquisition price is rumored to be in the $200-$225 million range.

Postscript Barry Schwartz: Jay Adelson from Digg posted that the rumors of a bidding war involving Google and Microsoft are “completely inaccurate.”