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Poker-faced Ballmer explains Google beating plans

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Ballmer committed to "at least" an annual investment of between $1.2bn and $.15bn a year on search and advertising just to remain competitive against Google.

The goal is to attract more users, creating more searches, puling in more advertisers and inventory, with advertisers buying more key words. He dismissed the proposed Yahoo! deal as a mere "tactic" to provide advertising scale and relevance. "We have alternative paths for getting relevance up," Ballmer said.

The path to getting greater relevance includes gilding the search and interface experience for users hooked on Google, plus a massive indexing of results to make Live Search actually useful to users and advertisers.

"If we are going to be in this game we have to innovate and reinvent, but we also have to ante up and the ante can look very large to you. To me it looks very smart," Ballmer said.

He didn't detail future R&D and marketing spend, just promised Microsoft would succeed with more - yes - anteing up. "How do we succeed? We are going to have to ante up in a significant way to even be in this game. If you play poker, you have to meet the main pot to be in the game."

Time to deploy demos to divert and confound financial analysts. Ballmer brought on lower-ranking executives to demonstrate changes in Live Search that add capabilities such as scrolling down an endless page of search results, rather than having to click through to a new page of results as you do with Google, and the ability to combine images in results rather than have them display separately.

Also demonstrated was the use of improved shopping with the ability to suck in shoppers' reviews and to categorize them according to type. Also, analysts were promised they would be able to book travel tickets using algorithms that would let them predict the best time to purchase air tickets or hotel rooms.®

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