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Microsoft playing waiting game against Google

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Microsoft will beat Google in the online advertising market through sheer tenacity during the next five years, not by offering a new or radically different online strategy, according to chief executive Steve Ballmer.

Ballmer surveys the competition

Ballmer, speaking at a Churchill Club lunch in Silicon Valley Thursday (pictured right), promised to "bootstrap" Microsoft's advertising engine with search, IM and Hotmail, Windows Live and Office Live, and sign partnerships with companies "large and small" that add value to those both buying online ads.

"We are hard at work on our own core services," Ballmer told an audience of tech executives and investors. "We will dive MSN hard but in Windows Live, the goal is to give the user a very customized and personalized view to manage RSS feeds, create your own custom portal [and] create an ecosystem around search."

Calling Microsoft a "Johnny-come-lately" to online advertising, Ballmer said the next several years are "critical" for Microsoft. "We have tenacity and patience to go after something... our patience distinguishes us from many tech companies that get impatient. It probably makes sense to talk about five years... you won't see an overnight transformation. It's going to have to be a long-term thing," Ballmer said.

That sameness of service will likely disappoint investors expecting a "Google or Yahoo! killer" to emerge from a $2bn plus spending program next year. Ballmer said Microsoft is prioritizing spending on a "platform cloud," storage cloud to find and rendezvous with users, programming platform, advertising and payment infrastructure.

Turning his attention to other competitive challenges, Ballmer promised to "catch up" with Linux in clustering, high-performance and secure computing while conceeding Linux is growing faster than Microsoft, overall, on servers. "By and large we are doing well and this is a year when we have big innovations in clustering, web serving and security, which are the three areas where we need to up our game," Ballmer said.®

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