Ballmer dismisses Google Android

Microsoft Chief Executive Steve Ballmer on Thursday dismissed the Android mobile operating system, saying he believed that building it was financially unsound for Google.

Speaking at Telstra's annual investment day, Ballmer said designing Android wasn't easy for Google. "They can hire smart guys, hire a lot of people, blah dee blah dee blah, but you know they start out way behind, in a certain sense," he said.

He questioned Google's ability to make money with Android. "I don't really understand their strategy. Maybe somebody else does. If I went to my shareholder meeting, my analyst meeting, and said, 'hey, we've just launched a new product that has no revenue model!'...I'm not sure that my investors would take that very well. But that's kind of what Google's telling their investors about Android," he said.

Ballmer said that although the idea was that Google gives away the operating system and in return gets to put its search on devices for free, he believes that telecommunications operators were smart and would still ask to be paid to carry search.

The lack of certainty around money would mean that the improvement of the operating system would be neglected, according to Ballmer, who said that in the whole scheme of things, there was other competition he was more worried about.

"Google doesn't exactly bubble to the top of the list of the top competitors we've got going in mobile. They might someday. But right now..." he said.

Telstra CEO Sol Trujillo also jumped in with his opinion. "My view is, (Android is) interesting, not compelling," he said.

The Telstra leader also wondered if Google has the expertise to follow through, saying there are always issues in a first-generation device that have to be ironed out. "Yes, first generation, you make the sale. The question is when you get into the second, third, and fourth generation(s)," he said.

Ballmer vs. Telstra?
Ballmer cracked jokes at the Telstra event, as the telecommunications company's live demonstration of 21Mbps speeds on its Next G network came unraveled.

"I do have to say, I think I probably did it," laughed Ballmer, pointing out that Telstra had already demonstrated the devices involved (which will launch in early 2009) to him privately.

"(Trujillo) wondered whether we were competing for all those years, and we finally got things in constructive partnership, and I went and ruined the first 21Mbps wireless demonstration ever. You're going to wonder about me again, Sol, I'm pretty sure," the Microsoft chief added, referring to a partnership unveiled on Wednesday between his company and Telstra.

Telstra has been upgrading its Next G network from its current 14.4 Mbps to 21Mbps, work it hopes to finish by the end of this year. However, despite the high maximum theoretical speeds of the network, until now, devices have been able to achieve speeds of only 7.2Mbps.

The company had recently announced that it was working with Sierra Wireless, Qualcomm, and Ericsson toward bringing out a faster device. Now Telstra looks to enjoy the fruits of the collaboration, with what it calls "the world's fastest mobile device," set to come out early next year.

When asked about when handsets might come out capable of 21Mbps speeds, Trujillo was coy. "That's clearly on the road map," he said.

"We're not only working with companies like Sierra and working on the dongle data card side of things, but we're also working with the companies that are on the handset side of things," he said. "Yes, we will have devices...but I'm not going to tell you when, because we like competing to win."

See also: Steve Ballmer: Live on ZDNet.com.au

Suzanne Tindal of ZDNet Australia reported from Sydney.