Competitive zeal of Ballmer key element in Yahoo chase

Ballmer has shown plenty of his own bombast in his CEO tenure, but the Yahoo pursuit is in some ways out of character. Michael Cusumano, a professor at MIT's Sloan School of Management, said Ballmer "likes to do R&D, internal R&D, and small, targeted acquisitions."

Clearly, Google has changed Ballmer's thinking on such matters. Ballmer is not the kind of manager content to let Microsoft trail Google in the online search and advertising markets while Google also threatens to steal Microsoft's thunder with free software applications.

Forrester Research analyst Shar VanBoskirk pointed out that after Google agreed to acquire online ad company DoubleClick Inc. for $3.2 billion, Microsoft responded with an astonishingly high $6 billion purchase of aQuantive Inc.

"It's like a Microsoft machismo thing," VanBoskirk said. "Flexing their muscle and showing how serious they are in this space."

That would also explain the court testimony of former Microsoft engineer Mark Lucovsky, who said that when he told Ballmer he was leaving for Google in 2004, Ballmer went ballistic, knocking a chair into a table in his office. According to Lucovsky, Ballmer lambasted Google and its CEO, saying he would "kill Google."

Lucovsky also said Ballmer warned: "Google's not a real company. It's a house of cards."

Ballmer has called Lucovsky's account a "gross exaggeration." But there's no question that now Ballmer has to show he's not the one building a house of cards.

His intense pursuit of Yahoo called into question the viability of Microsoft's solo Web search and advertising strategy. Despite a search technology overhaul and the aQuantive purchase, Microsoft couldn't get out of third place in the search advertising market.

Withdrawing the Yahoo offer may have spared the CEO from having to rationalize the massive deal, but it also leaves Ballmer where he started: on the hook to produce the online success that so far has eluded him.

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