Microsoft's Ballmer says, Google Reads Your Mail

Microsoft CEO Steve Ballmer took a knock at one of his chief rivals during a speech to an audience in the U.K., saying Google reads customer email as part of a failed bid to drive ad-based revenue.

The software giant's chief made the remarks during a discussion about consumer software revenue models, and Ballmer used the dialogue as an entry point to take his shot at Google. The video is available to watch via the web site Mydeo.com. Ballmer made his remarks after an audience member asked him if an advertising model could support software business in the future. The CEO said a combination of models - - commercial and ad-paid - - would go forward.

"What's a good example? Will online publications be largely ad-funded as things move from the physical world to the online world?" Ballmer said. "I think the answer is yes.

"Have we seen the migration of things even like email? . . . Our Windows Live Hotmail, in and of itself, doesn't generate much ad revenue. So we've had to put, essentially, a whole portal around it because the traffic around it is very valuable but it's not very easily monetized in the context of mail.