[mattmaroon]

That too seems to be mere speculation with no evidence or even sound reasoning supporting it. Nobody has yet presented a compelling picture of how search will stop MS from selling copies of Windows. It's no more accurate to say Google could compete in the OS space than it is to say MS could in search.

And don't even get me started on Office.

[mixmax]

I think the reasoning is pretty sound.

Microsoft know that in the long term the role of the operating system might dwindle since a lot of the stuff people do is moving onto the web. Salesforce, zoho and google apps are examples of this. This is extremely threatening to them since their main competitive adantage lies in their desktop dominance. So they obviously want to dominate whatever they think might be the next big thing, and one of these happens to be search. And the 500 pound gorilla in that market happens to be Google. And the fact that Google is also trying their hand at an online suite that might replace offfice one day makes them an even bigger threat.

Note that I'm not saying that the desktop is obsolete, or that the one that controls search controls the world. I'm merely saying that Microsoft is looking at current trends which point towards a lot of data and functionality moving to the web, and are hedging their bets accordingly. As they should.

[breck]

I agree. Especially about Office. I can't believe Alley Insider called GoogleDocs a direct competitor to Office. I see how Google Docs competes with Microsoft for the market of people that prefer to make spreadsheets and documents with 90's era tools, but for users who care about their work Office is much more powerful. The only cool thing about Google Docs is that it allows you to easily share lousy documents and spreadsheets with your friends.

[kijiki]

There is a book you might find illuminating: http://www.amazon.com/Innovators-Dilemma-Revolutionary-Busin... also, the essay "worse is better".

[breck]

I understand your point, but I think it is much easier for Microsoft to add better online collaboration to Office than for Google to add the extremely robust and powerful features of Excel to GoogleDocs. I think there is a market for GoogleDocs, but I don't think it's going to cut into Office's $$. GoogleDocs doesn't offer anything that Office '98 did besides online collaboration. I don't think many people would give up the office suite for GD, and as I said before--Microsoft has the hard part done--online collab is a lot easier.