By Lex Davidson

The title of this article is in response to the Financial Times interview of Steve Ballmer, Microsoft CEO.  When asked if Microsoft was abandoning their campaign to become a search leader and enter into the social space, Ballmer responded by saying,

“I think people don’t understand what they’re talking about. At the end of the day, this is about the ad platform. This is not about just any one of the applications. The most important application for the foreseeable future is search. It’s where you start things. It’s where you express intent. It is important.  I don’t think we can say, okay, well, we’re going to be in the ad platform business, and we’re going to do it just on the strength of non-search based assets. We have to be in the ad business, and we’ve got to have a good chunk. We don’t have to dominate, but we’d better have a darn good chunk of the search market over time, and we’re working away at it.”

Ballmer is correct when he says that search is critical, and he hit it on the head, when a user searches they express intent, which is the main unique selling proposition that search offers compared with the rest of the online advertising industry.  If you really think about it, how many other online ad units are given as a result of the user initiating the experience? None.  That is the main reason why Microsoft was so hot and heavy for Yahoo! It is surprising that Ballmer has completely pulled themselves away from the bargaining table, when it will be essentially impossible for Live.com to ever become a true competitor to Google without Yahoo!’s help.