'Our Windows Live Hotmail, in and of itself, doesn't generate much ad revenue,' explained Microsoft CEO Steve Ballmer during a Microsoft Startup Accelerator Programme speech in the UK this week. '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.' Then he added: 'Google's had the same experience, even though they read your mail and we don't.' [emphasis added]. Ballmer insisted that there was nothing controversial about this assertion:

"That’s just a factual statement, not even to be pejorative. The theory was if we read your mail, if somebody read your mail, they would know what to talk to you about. It’s not working out as brilliantly as the concept was laid out."

The privacy issues involved in serving up contextual ads against Webmail have been raised before of course, with Google always maintaining that no humans are involved, making privacy complaints moot.

One thing that Ballmer and Google do agree on though is that no one is ever going to pay for email services: "The average customer doesn't like paying for things," he said.

Techh-savvy readers of SYS-CON.com are doubtless fully aware, on the other hand, that e-mail, unless specifically encrypted, is insecure by nature. It's all sent plaintext so you have to assume that anything you send can potentially be read.

As of this writing Google has yet to respond to Ballmer's latest comment, which was made in the context of a general discussion about advertising-supported software. In June a British watchdog called Privacy International published a report claiming that Google has an "entrenched hostility to privacy." The report was compiled after a six-month investigation using a sliding scale of 20 different factors and data from public sources, and interviews with the companies and current and former employees. 

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