Microsoft's Ballmer: we'll pour more cash into our online offerings

Microsoft Corp. (NASDAQ: MSFT) CEO Steve Ballmer told an audience yesterday that the world's largest software company won't stop supplying its online services with cash in light of continued losses from that business unit -- for fear of ceding the race to rivals. In other words, Microsoft won't close its billion-dollar checkbook and give the world of online advertising and services to Google, Inc. (NASDAQ: GOOG).

Is Microsoft this afraid of Google, or does it see a fundamental shift of services moving from the desktop software program Microsoft owns (like Microsoft Word) to web-based replacement services? Or, does Microsoft just want a larger piece of the advertising revenue from web search -- an area that Google dominates completely and where it has made all its money? It's a little bit of both.

Don't put anything past Microsoft, I say. The company in some ways looks like a laggard, but it has the cash (net of a tiny amount of debt) to do anything it wants. Google's cash pile is growing tall as well, so although the Microsoft-Google debate will rage on, both companies will continue sparring inside the field of internet advertising. Both have the fortitude and cash to square off for a long, long time. Ballmer is no wimp by any means, and in 10 years we could have an internet ruled by both companies if this punch-counterpunch competitive strategy continues as it has. Someone call Evander Holyfield and Mike Tyson, please.