That’s the key thing for Microsoft here. The hostile acquisition bid of Yahoo is a piece to their long-term strategy puzzle– with a the tepid public reaction to Vista, increasing web functionality and acceptance, Microsoft must be thinking “What are we going to be a decade from now?”
Think about it. If the big players are moving to a more subscription-based, software as service (as Google is doing with Google Apps Premiere Edition), then Microsoft won’t be far behind. And given that they have been a distant third to the Google-Yahoo web dominance, MS may have found that they cannot dislodge any of the two giants soon by the time users have gotten critical mass. They are going ahead of the curve, so to speak, with getting Yahoo in their clutches.
Developing a good online brand when your equity lies on the operating systems market is a stretch and it has been evident for Microsoft. Perhaps there has been much user fatigue from their brand that people want anything else but Microsoft on their web lives. If this goes on on for a few more years, a snowball effect might happen and Microsoft’s brand equity and market share on the web may be nullified.