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Bill Gates: We’ll keep Google honest

Okay, I have to admit that I was laughing even as I typed the headline. Come on…does he think we’re stupid? He apparently said it all with a straight face, according to cNet News.

Says Bill: For Microsoft, we always want to be in the lead, making the breakthroughs. Chuckle. Any technologist will tell you that Microsoft has had one innovation in the history of the company (DOS), and he stole that from someone else (in the vein of buying Manhattan from the Indians). Microsoft Windows is a bloated, buggy piece of software that gained popularity and ubiquity from ruthless, brilliant and sometimes illegal tactics.

He also gave credit to his rival, saying Google has “done a great job on search and what they’ve done with advertising.” But, he reiterated his position that search today is still too much of a treasure hunt and promised that better things are in store.

“We will keep them honest, in the sense of being able to do better in a number of areas,” Gates said. Chortle. Honest is an interesting choice of words.

Earlier in the day, MSN executives showed off some of the work the company is doing in search as well as in Windows Live services. In a demo, MSN Vice President Blake Irving highlighted Microsoft’s effort to turn its Messenger product into more of a social networking tool, showing off a feature–currently being tested in Australia–that allows people to see their buddies’ buddy list, assuming the buddy and their buddies opt-in.

Any innovation there? Not much.

From cNet: In general, Microsoft didn’t exhibit a lot of new technology on the first day of the summit, showing mostly MSN and Windows Live services that had been previously demonstrated or are already in beta testing.

That sounds like the Microsoft I know.

And, even on its home turf, Microsoft took some knocks from some of its ad industry guests who noted that other Internet services have largely captured the mind of consumers.

One of the speakers, ad executive Rishad Tobaccowala, said that Google’s rapid iteration of its ideas is “one of the reasons Google is running circles around Microsoft.”

That sounds a lot like what they said when Microsoft was introducing Internet Exploder.

Stay tuned.

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