The latest in a string of downbeat declarations comes today, via Steve Ballmer’s visit to South Korea, where the Microsoft (MSFT) CEO warned that tech spending would take years to get back to its pre-recession peak. AP:

“The economy went through a set of changes on a global basis over the course of the last year which are, I think is fair to say, once in a lifetime,” Ballmer told a meeting of South Korean executives in Seoul.

Spending on information technology, which accounted for about half of capital expenditures in developed countries before the crisis, was unlikely to rebound fully because capital was more scarce these days, he said.

“While we will see growth, we will not see recovery,” Ballmer said.

Which is pretty much what he’s been saying for some time.

There’s at least one upside to this kind of relentless and sensible negativity, though: If you deliver any news that isn’t straight-up awful, people get ecstatic. As they did last month, when Microsoft posted a downbeat but better-than-expected earnings report (click on graph below to enlarge).

What else would you expect Ballmer to say? Now that Microsoft (MSFT) has got its hands on Yahoo’s (YHOO) search business–without paying a “boatload” for it–there isn’t a whole lot left to buy.

Emphasis on the word “buy.” Microsoft may still be willing to write a big check to boost its search share, specifically to get its hands on queries controlled by Time Warner’s (TWX) AOL, which has about three percent of the domestic search market.

AOL currently outsources its queries to Google (GOOG) in a deal that is said to make quite a bit of money for both sides of the table because AOL’s core user base tends to click through at a much higher rate than the rest of the Web. But AOL’s Google contract is expiring, and both Mountain View and Redmond are thought to be in hot pursuit of a new one. AOL CEO Tim Armstrong, though, is taking his time about his decision.

Also in the potential mix for Microsoft: A deal with News Corp. (NWS), which owns this site. Google’s $900 million search deal with News Corp.’s MySpace and IGN sites expires next year, but unlike the AOL deal, it has been a disappointment for Google.

It’s hard to imagine Ballmer spending much to wrest that one away, but News Corp. digital boss Jon Miller is doing what he can to drum up interest: He’s been talking up the idea of bundling multiple News Corp. properties–like, say, Dow Jones–into a larger deal. But since many of those properties have their own particular agreements and peculiarities, that’s going to take some doing.

Per usual, you can either argue that these modest gains are good news for Microsoft (MSFT), especially because they come after months of declines. Or you can argue that they are way too modest, given the hype and the media blitz that accompanied the launch.

My question: If you’re Carol Bartz and company and you’re about to launch a Bing-sized marketing campaign of your own, do Microsoft’s results give you encouragement or pause?

Again, the half-full argument is that the Bing blitz proves that given enough brute force, you can indeed use offline advertising to change online behavior, at least in the short term.

Half-empty: At least Microsoft’s pitch has an intriguing come-on–”Hey you! We’ve got a search engine that works better than Google (GOOG)! Come see for yourself!” But unless I’m missing something, there’s nothing equally compelling powering Yahoo’s “Its You!” push.

Maybe I’m wrong: Yahoo (YHOO) formally takes the drapes off its campaign this morning at a series of Advertising Week events. I’ll report back a little later today.

In the meantime, here are the newest comScore (SCOR) numbers, courtesy of JP Morgan’s Imran Khan (click on table to enlarge):

[Image credit: Seattle Municipal Archives]

Lee had a four-year run that began with a bang: Google (GOOG) poached him from Microsoft (MSFT) in 2005, which kicked off a legal battle between the two rivals.

Microsoft accused Lee and Google of violating a noncompete, and Google countersued. Both cases were settled out of court, but not before documents surfaced alleging that Microsoft CEO Steve Ballmer had once thrown a chair, called Google CEO Eric Schmidt a “pussy” and promised to “f—ing kill Google” while in the presence of another engineer who defected from Microsoft.

Less exciting but more important has been Google’s progress in China since Lee opened up its outpost there. The company was late to China and has been gaining ground, but still lags market leader Baidu (BIDU) there by a wide margin.

Last week, Microsoft was roundly praised for the way it structured its Yahoo deal. And today, the company seems to have struck a smart pact with Publicis, which will pay $530 million for Redmond’s Razorfish digital ad agency, which Ballmer never wanted anyway. And the French ad giant will agree to buy a certain amount of search and display inventory from Microsoft over the next five years.

The devil is in the details and we won’t know many of those until regulators sign off on the pact. And even then, we may not get the answer to two big questions: How much will Publicis actually be required to spend on Bing? And what are the penalties if it doesn’t fulfill the minimum?

But at first blush, it looks as though Microsoft (MSFT) managed to get out of a business it never wanted to be in in the first place–it acquired Razorfish as part of a $6 billion deal for aQuantive in 2007, and what it was interested in then was aQuantive’s ad-serving technology. And it may be able to force some dollars through its newly augmented Bing search engine.

That doesn’t guarantee that Web searchers will actually use Bing/Yahoo (YHOO), of course. Current estimates put the combined engines’ reach at 28 percent, and Google (GOOG) has just about everything else. One way to bump that up could be to dangle a big wad of cash–perhaps with the money Microsoft just made by dumping Razorfish–in front of News Corp. (NWS) and Time Warner’s (TWX) AOL, both of which have search deals with Google that expire in the next year or so.

The newly announced Google Chrome OS won’t show up until the second half of 2010, when it will first appear on lightweight netbooks. Eventually, it’s supposed to run on full-sized PCs. But Chrome OS will start working long before consumers start booting it up next year as it forces Steve Ballmer and company to open up yet another front in their long-running war against Google.

In its blog post announcing the move, Google (GOOG) explains that Chrome is supposed to address the shortcomings of existing operating systems: “Computers need to get better.” This could even be true. But what Google really wants to do here is vex its rival.

Google has been on this path for years as it systematically rolled out products that compete directly with Microsoft (MSFT) franchises: First mail, then a full suite of office software, then a mobile operating system, then a browser.

All of them are free or practically free. All of them launched without the full array of bells and whistles that their Microsoft rivals boasted. None of them produces any significant revenue for Google. And so far, mail is the only one that has generated mass adoption.

But all of them have succeeded just by existing: The chief aim here is to force Microsoft to defend its existing business, which makes it even harder for the company to attack Google’s search franchise. Now comes a full-fledged OS, the core of Redmond’s business.

As Techflash points out, Microsoft has been gearing up to roll out its newest operating system, Windows 7, as early as next week. That launch has already been a challenge, given that Redmond disappointed everyone with its last effort. And now Windows 7 doesn’t just have to compete with the ghost of Vista, but with the specter of an OS that doesn’t even exist yet.

I think it’s meh, but I’ll let the rest of you folks play armchair ad critic. Though I do want to note two things:

1) Ballmer himself has been able to bring himself to mention Google (GOOG) by name, but this ad doesn’t. But it still manages to poke fun at Google, and specifically YouTube and poor Tay Zonday. What did he ever do to you, Redmond?

2) Throwing TV money at a Web problem rarely works. Just ask the folks at Ask.com.

From The Wall Street Journal:

“Microsoft Corp. may re-evaluate its plans for job cuts, its chief executive said Tuesday, suggesting more reductions could be in store if the U.S. economic downturn worsens.

‘In case the situation gets dramatically worse in the U.S., we will have to rework’ our plan, Chief Executive Steve Ballmer said at a news conference without elaborating.”

Here’s one reason why Ballmer didn’t feel the need to elaborate: He said the exact same thing last week.

Here’s the quote, from a companywide memo distributed when Microsoft (MSFT) announced its second phase of mass layoffs:

“As we move forward, we will continue to closely monitor the impact of the economic downturn on the company and if necessary, take further actions on our cost structure including additional job eliminations.”

To reiterate: Ballmer, whose company has remained dour about the economy even as investors and other forecasters (like Rupert Murdoch) have shown more optimism, refuses to say he’s done firing people for the year. But he’s not saying he will fire more people. My hunch: If you ask him next week, he’ll say the same thing.

As Todd Bishop at TechFlash notes, Microsoft (MSFT) previously cut 1,400 jobs, and hadn’t actually committed to the 5,000 number.

But the company just posted a miserable quarterly-earnings report, and company executives spent most of the ensuing conference call warning investors that things look dire.

Here’s Ballmer’s memo to the troops:

From: Steve Ballmer
Sent: Tuesday, May 05, 2009 5:43 AM
To: Microsoft – All Employees (QBDG)
Subject: Update: Realigning Resources and Reducing Costs

In January, in response to the global economic downturn, I announced our plan to adjust the company’s cost structure through spending reductions and job eliminations. Today, we are implementing the second phase of this plan.

This is difficult news to share. Because our success at Microsoft has always been the direct result of the talent, hard work, and commitment of our people, eliminating positions is hard.

Today’s action includes positions in the United States and in a number of countries around the world. In the U.S., affected employees will be notified directly by their managers today. In other countries, local leadership teams will provide more specific information about the impact to their organizations.

With this announcement, we are mostly but not all done with the planned 5,000 job eliminations by June 2010. We are moving quickly to reach this target in response to consistent feedback from our people and business groups that it’s important to make decisions and reduce uncertainty for employees as quickly as possible, and so that organizations can concentrate their efforts and resources on strategic objectives.

As we move forward, we will continue to closely monitor the impact of the economic downturn on the company and if necessary, take further actions on our cost structure including additional job eliminations.

For those of you directly affected by today’s announcement, I want to thank you for your contribution to Microsoft and assure you that we will continue to provide support as we did during the previous job eliminations.

And for everyone across the company, I want to reemphasize how much I appreciate the way you have pulled together to help the company respond to this difficult economic environment. There’s no doubt that these are very challenging times. But together, we are making the right choices to ensure that we will continue to deliver great products and position ourselves for strong future growth and profitability.

Thank you for your continued hard work, commitment, and focus.

Steve

Ballmer was a little more expansive today, during his Q&A with BusinessWeek editor Stephen Adler at the McGraw-Hill media conference. But it’s pretty much what he’s been saying for several months: We’d like to combine our search business with Yahoo’s, but we can live without it. And when new Yahoo CEO Carol Bartz is ready to talk to us about it, she knows where to find us.

Here are the relevant bits from my liveblog of the chat, which just ended. Anything that isn’t in quotes is a paraphrase:

Adler: What’s up with Yahoo talks?

Ballmer: Principles first: “Whether or not there’s a partnership to be had with Yahoo, we think our own innovation… it’s not about Yahoo’s technology. It’s really about getting the pooled volume, because you actually can improve your product faster if you have more users.” If you have more advertisers, you can improve the product as well. “There are returns to scale. And putting the scale together is valuable.”

“With that as context, we’re largely on the same strategy, with or without a partnership with Yahoo.” I’ve talked with Carol briefly, over the phone. “I’m sure when it’s appropriate, we’ll have a chance to sit down and talk.” I’ve known her for years. She’s straightforward and friendly “and when she’s ready, we’ll have that type of discussion. Whether a deal gets done or not, who knows.” People at our two companies talk all the time.

Adler: Will there be a deal?

Ballmer: “There are a lot of things that are fairly compelling economically in trying to put our two search efforts together in a partnership.” I thought that last year, and “I got bailed out of this economy by Yahoo on that”. [Laughs].

Other highlights: Ballmer reiterated that neither he nor nor anyone in his family owns anything made by Apple (AAPL), but he conceded that Steve Jobs and company have done pretty well with their iPod/iTunes products. He still insists, however, that Microsoft is better positioned than Apple in the smartphone market.

And while Ballmer also acknowledged that Google (GOOG) has run away with the search market so far, he seemed less worried about its attempts to undermine Microsoft’s Office franchise with its free and low-cost Web-based software.

And Ballmer professed to be largely disinterested in the proposed IBM (IBM) and Sun (JAVA) tie-up, except to argue that he would be glad to see a competitor bogged down with post-merger headaches: ““I think it gives me a year or two where they’re digesting it. I relish that year.”

Here are excerpts from the event, and here’s my on-the-fly transcript.

Really? Because I listened to the event live, and if there was anything new from Ballmer, I missed it. But don’t take my word for it. Here are Ballmer’s comments, via a transcript provided by Microsoft (MSFT):

You all know that I would like to figure out how to pool somehow Microsoft and Yahoo. I’m not talking about doing an acquisition, blah, blah, blah, back to search deals, blah, blah, blah, I don’t know if anything is going to happen.”

There you go, Yahoo (YHOO) investors–go nuts.

Anyone who doesn’t care about the back-and-forth/will-they-won’t-they between Sunnyvale and Redmond may still find Ballmer’s presentation worthwhile. I was particularly interested in his comments about Microsoft’s continued interest in the TV/entertainment business.

I’ve embedded the slides from the event below; the first part of the presentation was from CFO Chris Liddell. You can listen to audio from the event here.

Ballmer_StrategicUpdate_022409 – Free Legal Forms

So. You need some time-wasters. Here’s one that’s distracted me for several minutes: YouTube Doubler, which allows you to play two clips on Google’s (GOOG) video site at the same time.

Why would you want to do that? My first thought was that it would make the “Is it true that ‘Dark Side Of The Moon’ syncs up perfectly with ‘The Wizard of Oz’?” question easier to answer. But someone’s already tackled that one. (Of course. Also, it appears the answer is “no.”)

Second thought: I bet you can do some good stuff with Microsoft (MSFT) CEO Steve Balllmer’s famous dance video. So here’s my attempt. Note that you may need to bring the volume up on the left hand clip while bringing it down on the Ballmer clip; also, the Ballmer clip won’t autoplay itself. What do you want? It’s in beta.

Can you do better? Probably. I’m particularly fond of this creation: Hank Paulson Vs. Milking Cow, via the YouTube Doubler favorites page.

If you’ve got a mashup you want to share with the rest of us, leave the URL in comments below, or email me: peter@allthingsd.com.

And who knows? Maybe John Chambers, Steve Ballmer and Brian Roberts will indeed say something important today and tomorrow at Quadrangle’s Foursquare conference. Chrysler’s Robert Nardelli is speaking too. He might have something newsworthy to say.

But you are unlikely to read about it.

That’s because there’s no press allowed at the private equity shop’s annual conference, which starts this afternoon at New York’s Plaza Hotel.

Or rather, there’s some press at the event. But they’ll be on stage. And they won’t be telling their readers and listeners what they saw and heard.

CNBC’s David Faber, Becky Quick and Maria Bartiromo, for instance, will be moderating panels over the next few days. So will the New York Times’ Andrew Ross Sorkin. And network TV news bigshots Katie Couric, George Stephanopoulos and Brian Williams will answer questions themselves (Portfolio’s Matt Cooper will be moderating that one).

Am I crabby because I asked (nicely) and couldn’t get in myself? Nah. It’s Quadrangle’s event, and they can run it any way they want. But it does look like a pretty good gathering of worthies. Maybe I’ll park myself in the Plaza’s lobby and see if I can bump into some of them.

Want to join me? Here’s the agenda for next two days:

Tuesday 11/11
2:00 PM WELCOME
Joshua L. Steiner (Quadrangle)

ONE ON ONE WITH JOHN CHAMBERS (Cisco)
Moderated by Jim Citrin (Spencer Stuart)

WHO DO YOU TRUST: INFORMATION AND NEWS IN AN  OPEN WORLD
Tom Glocer (Thomson Reuters), Nancy McKinstry (Wolters Kluwer) and Sheryl Sandberg (Facebook)
Moderated by David Faber (CNBC)

ALL ABOUT WIRELESS
Jean-Bernard Lévy (Vivendi), Naguib Sawiris (Orascom Telecom) and Ben Wolff (Clearwire)
Moderated by Steven Rattner

4:15 PM BREAK

GOING IT ALONE IN AN INTERCONNECTED WORLD
Philippe Dauman (Viacom), Charlie Ergen (EchoStar) and Robert Kotick (Activision)
Moderated by Becky Quick (CNBC)

GLOBAL E-COMMERCE: $500 BILLION AND GROWING
Barry Diller (IAC) and Hiroshi Mikitani (Rakuten)
Moderated by Steve Hasker (McKinsey)

6:15 PM COCKTAIL RECEPTION
Grand Ballroom Foyer
The Plaza

Wednesday 11/12
8:30 AM WELCOME
ONE ON ONE WITH STEVE BALLMER (Microsoft)
Moderated by Ken Auletta (The New Yorker)

INNOVATION AND THE NEXT BIG IDEA
Jean-François Decaux (JC Decaux) Robert Stephens (Geek Squad founder?) and Jim Wiatt (William Morris)
Moderated by Andrew Ross Sorkin (New York Times)

A CONVERSATION WITH SAM ZELL (Equity Group, Tribune Co.)
Moderated by Joanne Lipman (Portfolio)

10:00 AM BREAK

COOP-ER-TITION: A CONVERSATION WITH PETER CHERNIN (News Corp.) AND BRIAN ROBERTS (Comcast)
Moderated by Ken Auletta

REBUILDING A BRAND FROM THE TOP DOWN
Dan Hesse (Sprint) and Robert Nardelli (Chrysler)
Moderated by Maria Bartiromo

NOON Concluding Luncheon
CAMPAIGN 2008: IN FRONT OF THE CAMERA AND BEHIND THE SCENES
Katie Couric (CBS), George Stephanopoulos (ABC) and Brian Williams (NBC)
Moderated by Matt Cooper (Portfolio)

[Image Credit: PinkMoose]

We made an offer…We made another offer. It was clear that [Yahoo] doesn’t want to sell the business to us and we moved on. We tried at one point to do a partnership around search, not an acquisition. And that didn’t work either, and we moved on…and they moved on…We are not interested in going back and relooking at an acquisition. I don’t know why they would be either, frankly. They turned us down at $33 a share…I’m sure there are still opportunities for some kind of partnership around search.”