Ballmer Grilled on Yahoo Deal

Microsoft CEO Steve Ballmer couldn't avoid being trampled by the elephant in the room -- the company's bid to acquire Yahoo -- during a quirky keynote question-and-answer session at the company's MIX 08 conference Thursday.

The first question out of interviewer Guy Kawasaki's mouth during the hour-long interview was "what's the deal" with Microsoft's quest to purchase the struggling Internet and online advertising company? Kawasaki was appointed by Microsoft to grill Ballmer at the conference.

"We've made an offer," Ballmer said. "We've made an offer and it's out there, baby."

Ballmer reiterated Microsoft's stance that the company needs Yahoo to compete effectively against Google in online advertising, calling Microsoft the "little engine that could" against the wildly more successful search giant. He said search is the "killer app" for online advertising, and that advertising and the Internet -- already a "big thing" -- is poised to be the next "super-big thing."

"We've worked really hard to make it clear we have real commitment, real aspirations and real tenacity about being a really serious player in the world of search and advertising," Ballmer said.

Microsoft on Feb. 1 made an offer to purchase Yahoo for US$44.6 billion, which Yahoo's board has rejected. Microsoft is rumored to be mounting a proxy fight for the Internet company, but will not comment officially about the status of the deal.

Kawasaki, a former Apple fellow and Mac evangelist who now splits his time as a venture capitalist, author and public speaker, minced no words in his public inquisition of Ballmer. Wielding a new MacBook Air laptop computer, he baited Ballmer about a host of topics, including Google, problems with Windows Vista and competition with his own former company. He also complimented the attitudes of employees at what he calls the "new Microsoft" for being less arrogant and far easier to work with than people he encountered at Apple.

During his questioning, Kawasaki called Google the "G-word" and teased Ballmer when he wouldn't say the company's name in answer to a question about it. Proving his mettle as a good sport, Ballmer chided Kawasaki for not saying Google's name either, then countered, "I can say the name: Google, Google, Google."

Though Ballmer did touch on some serious topics during Thursday's keynote, the interview had many light -- and sometimes downright bizarre -- moments, as the two men attempted to keep a professional tone during a very unconventional interview.

At one point Kawasaki asked Ballmer if he considers Apple a "little Chihuahua you kick away," to which Ballmer replied by barking in imitation of a little dog. He then acknowledged that Apple has done a good job of chipping away at Windows market share, and that Microsoft is an underdog competitor in the media-player market against the iPod.

Kawasaki also showed off his ultra-thin MacBook Air, and Ballmer offered to have a "bake-off" between his Toshiba notebook and the Air. He also took the Air from Kawasaki and mimed falling to the ground because it was so heavy.

Defending Air's absence of a DVD drive when Ballmer said it was missing "half the features," Kawasaki said, "DVDs are so passe," to which the grinning CEO retorted: "Tell that to your kids on a long flight, pal!" The remark inspired Kawasaki to inform Ballmer, "I'm never going to invite you back to MIX."

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