Day 2.0 of this year’s Web 2.0 Summit kicks off with a conversation with Steve Ballmer, CEO of that little-known Seattle software company.

After the horror of the main room yesterday, Ian and I have moved to the ‘Nokia overflow room’. This is how a conference should be; comfy chairs (and sofas), power, a sensible temperature, wifi, space! We’re linked to downstairs via a big video screen, so can probably see the stage better, too.

John Battelle – “is Google still a one-trick pony?”

Steve – “companies tend to start in an area, get good in an area, and then fill out around it… with a technology model and a business model… What’s unusual about Microsoft is that we already have two of those areas; enterprise software and operating systems. Also trying to establish ourselves in the entertainment and search/advertising area.”

So was that ‘yes-ish’ ?

John – “What do you make of the growth of the Facebook developer community?”

Steve – “Any really exciting application will have a developer story, but it doesn’t replace an operating system.”

“Web experiences are going to get richer, and become more programmable” eg Expression and Silverlight.

Popfly announced as going into open beta today. Popfly is “a Silverlight application that allows anyone to build an application without writing any code.” So like Yahoo! Pipes, then?

Demonstrated on stage, building an application using data from inside Facebook. Microsoft seem to really like Facebook right now, don’t they? John Battelle did push Steve on how far that interest went, but Steve wasn’t committing to anything. He did seem to know a lot about what Facebook’s up to, though…

John Battelle – “Wow, that was very Web 2.0”.

Moving to Office… John ‘confused’ by Office Live brand. Asks what Steve thinks of Zimbra, Google Office, etc.

“Our job is to deliver productivity. What is Outlook? What is its technology model? It’s a rich client app, it runs on mobile devices, you can access it on your phone, you can access it over the web. So what is Outlook?”

Room for a variety of approaches, all of which play into delivering the best experience for someone … and productivity.

John – “Is Google Docs and Spreadsheets a good product?”

Steve – “If you want to do what people do today with Office, then no. If you just want to get a few people to collaborate… then maybe yes”

John – “Let’s talk about search”

Search is long-term play for Microsoft. It’s important. It’s getting better, and they’re in it for the long haul. “You have to do search well to build a successful web advertising business”… and Microsoft have said they want to build one with higher revenues than Google’s current advertising business… higher even than NewsCorp’s.

John – “Everyone wants to put you together with Yahoo! – what do you say?”

Good people, good technology, but it may or may not make sense to us and Yahoo! and our investors.

Question from floor… “you suggest ad syndication is going to be redefined?”

Steve – “yes, move beyond text. Video, audio, guaranteed delivery via rate card from the ad platform itself. At the moment all anyone really sells is context… we need to add behaviour.”

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