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Preston Gralla

Seeing Through Windows

Ballmer: Microsoft can't make money from its free products and services

14 comments

TAGS:Bing, Google, Microsoft, Windows Live
IT TOPICS:Desktop Applications, E-Business & Web 2.0, Enterprise Software & Services, Internet, Operating Systems, Software, Windows & Microsoft

Microsoft CEO Steve Ballmer apparently disagrees with one of Microsoft's key business strategies --- to make money from free services and software such as Bing, Microsoft Live, and the upcoming Web-based version of Office. At his recent announcement of new mobile software, he said that "Free is not a business model...You'll have to ask our competitors if they'll make money on free things."

Earlier this week in Paris, Ballmer introduced Windows Mobile 6.5. During that introduction, Ballmer said that Microsoft does not care that Google's Android will be free, and claimed that Microsoft can't make any money out of offering free software or services. Reuters quotes him as saying:

"Free is not a business model. We are a commercial company, we will look to gain revenue and profit from our activities. You'll have to ask our competitors if they'll make money on free things."

The site techdirt notes that Microsoft gives away plenty of software and services for free, such as Internet Exploer and Microsoft Security Essentials and goes on to say:

Is Steve Ballmer admitting that he doesn't know about any of these things... or is he just expecting that the reporter and the readers of the article are flat-out stupid?

With Ballmer, it's hard to know what he had in mind; he frequently suffers from foot-in-mouth disease. Microsoft has spent billions on Bing and Windows Live services, and clearly hopes for payback. If the company truly believes it can't make money on free services, why has it made that investment? If it can't make money on free things, it should stop trying to catch Google in the search market. Google has clearly found a way to make plenty of money by offering free software and services. Is Ballmer is saying that Microsoft is incapable of doing the same?

Most likely, Ballmer was doing what he often does --- speaking without thinking. He should realize, though, that he does Microsoft no good by shooting from the lip, especially when it's about an area in which Microsoft has been playing catch-up for years, and shows no signs of closing the gap with Google.

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Microsoft cannot make money

Submitted by Anonymous on October 10, 2009 - 6:21 P.M.

Microsoft cannot make money from free software, because they don't have support services that are worth paying money for.

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Microsoft makes money every time

Submitted by Anonymous on October 9, 2009 - 9:47 A.M.

Microsoft makes money every time a developer writes application that requires Windows.

Cry me a river!

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Google Search isn't free...

Submitted by Anonymous on October 8, 2009 - 1:48 P.M.

Google Search isn't free. It's ad-supported.

In addition, via Google's cookies, users pay for the service by giving Google information about their activities. This information is used by Google to increase their advertising profits.

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I've been using Google for years

Submitted by Anonymous on October 8, 2009 - 2:31 P.M.

and so far I did not receive any invoice from them. Secondly, I am aware they have a record of every word I typed in the search box (and some but not all of the websites I've visited) and I didn't notice any effect on me, on my browsing patterns or on my purchasing habits. If Google managed to make money out of this then I'm happy because I didn't have to pay a dime.

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Not only that...

Submitted by Trapper John on October 8, 2009 - 2:34 P.M.

...but I scored some Google stock at a bit over 300 bucks a year ago. It just leapfrogged over $500. Now, how has Microsoft done during the same time frame? :-D

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Right...

Submitted by Matt on October 9, 2009 - 12:38 P.M.

...and the stock market in general is up 18% year-to-date. What is your point?

Google is still 90% ad-revenue, whereas Microsoft actually sells products. Google HAS to give everything away, because you get what you pay for...

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This goes along with Ballmer

Submitted by Anonymous on October 8, 2009 - 1:27 P.M.

This goes along with Ballmer saying IBM should get back into the commodity hardware business. IBM makes a bit of money off of free software like linux. They use that to sell support, services and their big iron. Ballmer needs to go he is not moving Microsoft forward, he is living in the past.

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Steve Ballmer's 'Free' is typically reactionary

Submitted by TimeClock Guy on October 8, 2009 - 1:14 P.M.

Ballmer indeed suffers from foot in mouth once again...

Free means the user doesn't pay for it, not that no one pays for it. As in free Television broadcasting, free Google searches, & free Google gmail. All very profitable businesses.

Ballmer seems to be irritated because Microsoft hasn't figured out how to monetize their free software products and services.

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Still using the business model of greed.

Submitted by Dest on October 8, 2009 - 2:45 P.M.

Steve Ballmer has successfully proven himself to be a complete buffoon and he is still can't understand why the vast majority of people despise him.
He still believes that people only hate him because they are envious of him.
No, Steve, people don't like you because you are paranoid of people stealing from you and angry about people maybe getting something for free and you say and do stupid things and continue to ruin the reputation and credibility of what used to be a great company.
No amount of your crazy buffoonery is going to get people motivated enough to like you.

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