25 June 2009 | Author: L. Sutherland Head of Media Content

Steve Ballmer claims future grim for traditional media

Microsoft's chief executive painted a grim picture of the future of the global advertising economy as the Cannes Lions International Advertising festival - for traditional media outlets anyway.

Steve Ballmer, CEO of Microsoft since January 2000, claimed that the advertising economy had been reset at a lower level and that media companies shouldn't be expecting revenues to bounce back to pre-recession levels.

According to the Guardian, Ballmer argued that, as advertising revenues continue to migrate to digital outlets, traditional broadcast and print media would have to plan business models around a smaller share of the market. He said: "I don't think we are in a recession, I think we have reset.

"A recession implies recovery [to pre-recession levels] and for planning purposes I don't think we will. We have reset and won't rebound and re-grow."

Microsoft's helmsman also asserted that traditional media organisations have thus far done a poor job of adapting to the digital age. Instead he suggested that publishers are failing to generate substantial digital revenues, despite his prediction that within 10 years all traditional content will be digital. "Static content won't cut it in the future," he claimed.

Therefore, Ballmer suggests that media businesses must provide the correct combination of context and relevance to create a compelling online presence for consumers if they wish to evolve. He claimed that replicating a print newspaper online is an endeavour doomed to failure, and that the future of digital advertising is dependent on good, relevant content.

Ballmer was named media person of the year at the Cannes Lions event and, during a question and answer session at the end he was predictably asked to comment on Microsoft's position regarding Yahoo! and the drawn out dalliance between the two. He replied:

"We have no interest in acquiring Yahoo!. What we have said is that we will continue to remain open to a partnership with Yahoo!."

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