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Where did Microsoft's ambition go?

Steve Ballmer and Bill Gates are apparently more concerned with distributing tablet PCs than winning on the web. This is a sad day for Microsoft shareholders.

If you haven't yet, take a few minutes to watch the second set of highlights from Walt Mossberg's and Kara Swisher's interview with Steve Ballmer and Bill Gates at the All Things Digital Conference. As the interview opens up to audience questions, Tim O'Reilly asks Gates and Ballmer a very pointed (and poignant) question:

Microsoft has been playing "me too" these past few years, following the lead of other innovators. Do you have any "big, hairy [audacious] goals" now, he asks, or do you need to?

In other words, where did all the famous Microsoft ambition go?

Bill Gates blundered through a response about "Quests" and such, and then honed in on putting a tablet PC in the hands of every student in the world. Ambitious? Perhaps. Inspiring? Not even close. It's just a tired extension of Microsoft's current dominance, without a thought for interesting new vistas for computing (pun intended).

But where things got really odd was when Tim followed up with a question about why Microsoft spends so much time talking about search and the web when these weren't mentioned by Gates as Microsoft's goals.

The response? "You've been paying too much attention to the press." In other words, Microsoft isn't super-worried about winning in search/beating Google.

I'm sorry, but this might make Ballmer feel better on stage amongst his peers, but he spends an inordinate amount of time talking about "killing Google". I'll believe he's unconcerned when he starts displaying the nonchalance of someone that is unconcerned.

But he should be concerned. "A tablet for every student" is a very pedestrian, circa 1990 sort of vision for Microsoft. It may well make the company more cash, but it's not going to guarantee its future. The web does, and Microsoft continues to flail on the web.

Microsoft does need ambition on the web. It has been playing catch up there. It needs to change. Part of that change will come from a public recognition that it is losing badly, with a complete corporate focus on winning.

Until yesterday I thought the company was stumbling toward this sort of a response, but Gates wishy-washy answer about tablets makes me think the company has too much cash to be able to see a future where it's largely irrelevant, awash in tablets but a nonentity on the web that stitches them together.