Microsoft says Google success was 'wake-up call'

The success of Google served as a "wake-up call" for Microsoft to the financial power of Web advertising, Microsoft's chief technologist said on Tuesday.

Google's success forced the company to consider advertising as a new revenue stream beyond its traditional licensing and subscription model, Microsoft's chief software architect Ray Ozzie said at a Goldman Sachs investor conference in Las Vegas.

"Google's success very clearly caused an inflection point within the industry and within Microsoft," Ozzie said in a question-and-answer session monitored online.

Ozzie stepped into the top technical position at Microsoft last year, replacing co-founder Bill Gates and spearheading an important transition for the US$44 billion company to extend its reach beyond the computer desktop.

The challenge for Ozzie is to deliver a host of Web services alongside Microsoft's classic out-of-the-box software to remain competitive with online rivals like Google and Salesforce.com without compromising its core desktop software business.

Shares of Microsoft were down 32 US cents, or 1.1 percent, at US$28.75 in morning Nasdaq trading.

callgooglemicrosoftsayssoftwaresuccesswakeupwas