Without a search strategy that works and with Yahoo potentially linking up with Google, a partnership that is expected to be announced in a few days Microsoft is an empire in rapid decline.
Let's start with its core competence, operating systems. Vista is a disaster and Windows 7, its successor, is two years away. By then, the market for desktop/laptop operating systems will be smaller, perhaps dramatically so.
I could go on and on, ticking off the things that Microsoft needs to fix. But Kevin Johnson, president of the company's platforms and services division, does a far better job than I could. He oversees the 14,000 people who work in the Windows and online divisions of the company. He took over the job three years ago, which means that Vista is his baby. In a memoto employees Sunday that touched on the latest Yahoo overture, he admitted that Microsoft's search biz has stalled... at this point even a Yahoo acquisition might be too late.