> So MS got more interested in the search engine business.. Google doesn't like it and wants to fight back..
Don't be mistaken. Microsoft and Google are in all out war, and Google is winning easily. Microsoft is only interested in search because google has used it to create a competive advantage, and they're using it to break it Microsoft's other markets. (deliberately and with force, not out of spite)
MS Desktop Search (next version of OS)->google desktop search
MSN Search->google search
hotmail/exchange->gmail
MSN Maps->maps.google.com
Every product, people prefer the google version, and they're making money off these products even though consumers aren't paying for them. MS can't snub google out. MS has changed the way it does business at it's core to compete with google, and they aren't even slowing google down. Microsoft can't compete with google on any front, no matter how much money they throw at it. Google is expanding it focus to include Operating Systems (they've hired away a lot of Microsoft's top OS talent) and now office suite. If google proves to be as succesful in these new fronts as they have been in past ones, Microsoft will be forced to re-invent itself or perish.