Microsoft’s chief executive has made it clear that he does not fear Google Mobile’s Android operating system, saying that the search giant’s mobile offering is low on Microsoft’s list of competitors.

At a meeting for investors in Sydney today, the outspoken Steve Ballmer, said Google would not have an easy time convincing handset manufacturers to adopt the Android technology.

“They’ve got some smart guys and hire a lot of people — blah-di-blah-di-blah,” Ballmer said of his rival. “They start out way behind in a certain sense, and we’ll see how they do.”

He made it clear that he was not giving them a hard time: “I’m not giving them a hard time” - before continuing his assault.

He feels that because Google isn’t charging for Android that they won’t put in the same level of investment required to improve the product. He said that Google open sourced Android him the hope of having the open source community do the hard work – but he doesn’t know where Google plans to make money from.

“I don’t really understand their strategy…if I went to my shareholder meetings and my analyst meeting and said, ‘Hey, we just launched a new product that has no revenue model — yeah, cheer for me,’ I’m not sure my investors would take that very well, but that’s what Google’s telling their investors about Android,” Ballmer said.

“If somebody thinks the formula is you give away your operating system to get search [usage], the operators are much too smart; they’ll know they can still ask to be paid to carry your service.”
Ballmer said he was far more concerned about the competition from the Jesus phone, the Blackberry, Symbian and Linux Mobile.

“Google doesn’t exactly bubble to the top of the list of the toughest competitors we’ve got going in mobile,” Ballmer said. “They might some day but right now I think [not].”

Ballmer may have opened his mouth before engaging his brain, as the reason for Google pushing the Android platform was to push Google’s web services, and to fill user’s phones with advertisements. However, he may be right in saying that it might not go entirely to plan. Google were one of the last of the big name companies to get into the smartphone market, and the G1 is pretty flawed – you have to ask is it to little too late for Google?