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Ballmer, who was speaking to an audience in the UK, claims making money from email services is very difficult.

"Our Windows Live Hotmail doesn't generate much ad revenue, so we've had to put a portal around it, because the traffic it brings is very valuable, but it's not very easily monetised," he claims.

He then launched an attack on Google, claiming its business model of selling advertising

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based around the content of email is flawed. "Google's had the same experience, even though it reads your email and we don't."

"The theory was if somebody read your mail they'd know what to talk to you about. Well, it's not working as brilliantly as the concept was laid out," Ballmer claims.

However, the Microsoft chief does concede that advertising will become increasingly prevalent in the future. "The average customer doesn't like paying for things. Anything that can be ad-funded sensibly to the customer, and sensibly to the provider, will be," he says.

However, he concedes there's a danger of antagonising customers. "Are there experiences... [when what you would need to do] for advertising is so invasive, so persistent, so painful that users wouldn't want them. The answer is yes."

Click here to see the video of Ballmer's speech