Microsoft is getting serious about its MSN search engine and says it will increase its investments in MSN and its other online businesses with 60 percent to $1.6 billion next year.
"It's important for you to understand our deep commitment," Mr. Ballmer said. "Only two to three companies can really deliver the infrastructure that's required to keep pace with consumer demand and advertisers' needs."
Microsoft is investing in advertising and search technology, and is building computer centers to manage the services it offers in a bid to catch Google, which dominates the search market. Microsoft, the world's largest software maker, is having difficulty matching Google's rapid product development and customer appeal.
Speaking at the conference on Wednesday, Microsoft's chairman, Bill Gates, said Google had done a "great job" in search and advertising, but added: "We will keep them honest. I think this is a rare case where we are being underestimated."