Ballmer Backs Microsoft Bing With $5B Budget

The head of Microsoft says he isn't getting overconfident about Bing' early success. CEO Steve Ballmer says he's prepared to be patient while building Microsoft's search business and says the firm may spend almost $5 billion a year on search technology.

Speaking to the Executives Club of Chicago, Ballmer said "In our industry, the No. 1 mistake that people make is that they quit too early. If you look back at any great technology business, it took a while to build up."

A good example: according to Ballmer, MS Windows (which was introduced in 1983) didn't become a mainstream hit until around 1992. (Source: seattlepi.com)

Microsoft Left It Late

Intriguingly, Ballmer conceded that Microsoft's goliath status works against its ability to innovate.

He said start-up companies are under such pressure to make it big quickly or go under that they are forced to take risks, whereas major firms tend to play it safe. This explains why, in his opinion, Microsoft waited too long before making a serious and effective challenge to search rivals Yahoo and, more importantly, market leader Google.

Having reached that stage, Ballmer said, Microsoft will be tenacious in the market and argued that when attempting to bring fresh ideas such as Bing, firms can't "give up in six months, or a year or two years."

Putting Money Where His Mouth Is

It's pretty clear those sentiments will be backed by cash. Microsoft is already known to be spending the better part of $100 million on advertising and other marketing efforts for Bing.

Ballmer noted in his speech that Microsoft wants to spend between five and ten per cent of its annual income on improving its search technology, which could be almost $5 billion. That's more than half the money the firm currently spends on research and development for all its products. (Source: crn.com)

Early figures suggest Bing is performing well and boosting Microsoft's search engine market share. However, it's not clear how much of this has to do with Bing's novelty (aka "beginner's luck") or the way Microsoft now has all its search statistics covered by a single brand.