Last week, Eric Schmidt stated in an interview that Bing, not Apple or Facebook, is Google's biggest competitor.  Now Steve Ballmer has responded, essentially agreeing and indicating that Bing will continue to innovate and pose a threat.

Microsoft's CEO told Sharon Pian Chan with respect to Schmidt's comment, "He's right! . . .  We're his best competitor, and we're a very good competitor and we're going to do a very good job."

Later, Ballmer added, "In a sense, because we have lower share, it's almost easier for us to try new things.  They have to sort of stay conservative, they gotta make a lot of money. . . .  Boom, boom, boom, boom, we're just moving, floating, differentiating. . . .  That's our job to be the disrupter in this business, and we're going to work hard at it."

An example of this might be Bing's image search, which Google later copied to a degree.  Also, Bing Maps had its Bird's Eye view long before Google Maps got into 45° imagery.

Of course, Google isn't a completely stationary target, as the launch of Google Instant should prove.  And plenty of people would argue that having a large market share is a good thing, not a handicap.

It shouldn't be too long before comScore, Hitwise, and Nielsen are able to weigh in on the state of the search market in September, anyway, and show which engine made the most progress in the fight's latest round.