“The Impact of Web 2.0” was the theme, and Hurley, not Gates, had the opening honors. Gates patiently waited to be called upon and he eventually was, asked to weigh in number three, after Caterina Fake, Founder, Flickr. 

Every year we move to more of a digital environment and we take away the older approaches…We will have communication systems using your Internet network with far richer, more flexible software-driven systems…The user interface gets more natural, finally speech, ink, vision, are coming in to complement the keyboard-mouse we’ve been using.

Gates was the elder business statesman, and still the richest man in the world, but the adoring World Economic Forum crowds clamored for Chad. 

Microsoft is chronologically a more mature company than Google. Ballmer also views Microsoft as the more mature "entrepreneur." Ballmer engaged the audience of Stanford students with colorful, pointed quips about the Microsoft Internet nemesis: "Google’s built one very good business…but they only have one thing that they do, everything else they do is sort of cute."  "I don’t really know that anyone has proven that a random collection of people doing their own thing actually creates value." "Right now, Google is the part of the cycle where they are milking, its the fun part of business…you’ve got something good going, you follow your customers, you do all of the innovator dilemma stuff, you follow your customers, collecting money, la la la, its twenty percent, twenty percent, we don’t have to do anything new, we just have to do it twenty percent more next year." (photo taken at the NRF Convention in January, 2007, see "Microsoft: Steve Ballmer sells to retail in NYC")

Despite Ballmer’s Google chiding, he nevertheless put forth a solid, although concise, mini entrepreneurship case study on “Growth Theory,” The four stages to business. 

1) Invent something, it may or may never take off,

2) Get something to critical mass,

3) Milk it like heck when it is at critical mass,

4) Create culture to start the loop again.

Desktop was a trick and Server was a trick. The third trick, we’re trying to do online, the fourth trick, we’re trying to do consumer electronics.

Google claims to be on track to “organize” not only ALL the world’s information, but ALL the world’s advertising, to boot. Despite Google CEO Eric Schmidt’s “fantasy” of being a one-stop advertising shop for the world’s marketers, and years of trying, Google remains very much a one-trick pony nevertheless, as Ballmer said.  In Ballmer “Growth Theory” terms, Google has not been able to invent a second “something” that has “taken off” for a meaningful impact on the Google bottom line.

WHY NOT? 

Ballmer called the pace of Google’s staffing ambitions “insane” and juxtaposed it to the Microsoft steady, incremental approach:

Trying to double in a year…we’ve been digesting a certain percent growth over many years, what that has allowed us to do is to build up a base of capable people who can take on more capable people…

Just as Google privileges rapid personnel growth over rational team optimization, the company introduces new products and acquires new technology seemingly almost willy nilly, favoring non-stop apparent “innovation” rather than successful, long-term development.  CEO Schmidt, in fact, proudly reported to Wall Street in his Q2 earnings call that “the new products are coming at a fast and furious rate.” In his Q3 call, he touted “the blizzard of new product launches.”

Google also reels in assets at a fevered pace, from high-profile, high cost acquisitions—dMarc Broadcasting, YouTube—to absorption of two-person, university entrepreneurial projects, such as Dodgeball. As “everyone’s favorite garage band,” and a rich one at that, Google has an almost carte blanche to add any technology or any company to its Googley inventory. The acquisition, however, is the easy part. The integration is the “Rub,” the Google "BackRub," that is.

(Google lore: By January of 1996, Larry and Sergey had begun collaboration on a search engine called BackRub, named for its unique ability to analyze the "back links" pointing to a given website.)