Steve Ballmer’s Email to Microsoft Employees

Techcrunch.com has released an email sent by Microsoft CEO Steve Ballmer to Microsoft employees:

This afternoon I sent the attached letter to Jerry Yang announcing that Microsoft has withdrawn its proposal to acquire Yahoo. We proposed the deal in the belief that a Microsoft-Yahoo merger would create a combined company with the resources and assets to win in the fast-growing market for advertising and online services.

Ballmer spends most the email bolstering the company’s initiatives in terms of Internet advertising, and explains that the Yahoo merger was more of an accelerated means to obtain the company’s vision on the Web rather than an end all be all.

Although the acquisition of Yahoo would have accelerated our ability to deliver on our strategy in advertising and online services, I remain confident that we can achieve our goals without Yahoo. We have a strategy in place to do so and we will continue to expand on this strategy and accelerate our progress.

The strategy, according to Ballmer had three main components:

· Deliver on the basics. We will continue to improve search relevance and build out our ad platform.

· Change the game through innovation. We will expand investments in engineering and deliver transformative tools and Web experiences.

· Expand our global scale and focus. We will pursue partnerships and investments to realize the competitive advantages that come with scale.

I take this email with a grain of salt.

As much as his letter to Yahoo seemed to be structured to devalue his search competitor, this email looks like a bid to boost Microsoft’s value.

The reality remains.

Among the big three Microsoft’s Live Search is by far the most lacking search property in terms of relevance and usage. Besides there investment in Facebook, their approach towards becoming a far reaching online media power has been rather tame.

The question for Monday will be whether this withdraw will be seen as a swing and a miss to Microsoft investors, or as a well played business maneuver?

The time and the market will answer that.

The reality for Microsoft is that they need to take Ballmer’s advice and go back to work on Monday with focus.

Ultimately, our goal is to build the industry-leading business in search, online advertising, media, and social networking.

We are absolutely committed to being the leader in each of these areas. Now is the time to do what we have always done best—be tenacious, focus on the long term, innovate, and keep working hard.

I think they have more than a short distance to go in reaching their goals.