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Microsoft’s Ozzie On His Company’s Web Strategy

imageMicrosoft (NSDQ: MSFT) Chief Software Architect Ray Ozzie, who famously zinged his company back in 2006 for not moving aggressively enough to the Web, was much kinder to the company during the annual State of Technology luncheon in Seattle Friday.

“There are many things you can criticize, but if you look at where (our) products were at the time, how PC centric, server-centric people’s views were… there has been a dramatic shift (at Microsoft),” he said. As proof, Ozzie rattled off a set of new web-based offerings, including a hosted version of the Exchange e-mail service that was released this year and a soon-to-arrive online, ad-supported version of Office.

In October 2006, Ozzie, then Microsoft’s chief technical officer, wrote an infamous memo in which he said that advertising-supported services and software presented a fundamental challenge to the company’s business.

Ozzie also mentioned another challenged industry — newspapers — at the luncheon talk. His views on journalism, netbooks and more after the jump.

On the future of newspapers: “There is a new business model with anything that can be delivered digitally,” Ozzie said. “Look what’s happening with news. I’m not certain what the new business model really is but certainly the old business model is impacted … It’s not clear that as these new models come into play whether revenue or profit pool in a given industry is equivalent in the new world as in the old world. Could very well be that the business model is sound in that there is a business but not the size of the business. If journalism is something we care about we’re going to have to find new ways to subsidize that.”

On new businesses in the works at Microsoft: Ozzie mentioned two. He said that the company had incubations in health and education, although he did not give details. He also said there was “some work going on in energy.”

On netbooks: A proliferation of netbooks has cut into sales of the Windows operating system, but Ozzie was nevertheless upbeat. “It’s an incredible opportunity,” he said. “These are sales that might not have occurred. There are markets that are buying PCs now that we have written off.”

On the next big thing in technology: Ozzie said that “we are moving to a world of three screens and a cloud.” Consumers, he said, would all have “media and entertainment delivered to us in some coherent way across something the size of a phone, something the size of a PC, and something the size of a TV.” Not coincidentally this has been a theme for Microsoft for over a year now.