DigitMemo.com

Microsoft CEO Steve Ballmer saying Google reads customer email as part of a failed bid to drive ad-based revenue.

The software giant’s chief made the remarks during a discussion about consumer software revenue models, and Ballmer used the dialogue as an entry point to take his shot at Google. The video is available to watch via the web site Mydeo.com. Ballmer made his remarks after an audience member asked him if an advertising model could support software business in the future. The CEO said a combination of models - - commercial and ad-paid - - would go forward.

“What’s a good example? Will online publications be largely ad-funded as things move from the physical world to the online world?” Ballmer said. “I think the answer is yes.

Google, which operates the free Gmail service, publicly acknowledges that its “processes personal information” via cookies and on its servers, so it can provide “our products and services to users,” as well as to keep its service running well.

It adds:

Google processes personal information on our servers in the United States of America and in other countries. In some cases, we process personal information on a server outside your own country. We may process personal information to provide our own services. In some cases, we may process personal information on behalf of and according to the instructions of a third party, such as our advertising partners.

Google doesn’t say it “reads” email, however.