Is it time to short media stocks? Maybe. Microsoft CEO Steve Ballmer tells BusinessWeek in an interview on its Web site that it’s not such an outrageous idea if Google gets its way.

This is what he said about Google’s end game with this week’s deal to buy YouTube for $1.65 billion.

“The truth is what Google is doing now is transferring the wealth out of the hands of rights holders into Google. So media companies around the world are all threatened by Google. Why? Because basically Google is telling you how much of your ad revenue you get to keep.

They better get some competition. Us. Yahoo! Somebody better break through or you can short all media stocks right now. As long as there are two, you can hold onto media stocks.”

There you have it. Some company, preferably Microsoft will rescue the media industry from the clutches of Google.

Also check out Ballmer’s thoughts on sky-high Web 2.0 valuations and how Microsoft got outbid by News Corp.’s Rupert Murdoch on MySpace. (BusinessWeek)