Note: The rest of this piece is speculative conjecture.
- banner ads have been done (and ended up as not a very profitable measure)
- pop-overs/unders have been done (and ticked off quite a few)
- competing search engines have been done (Google was a late-comer but had a better product [and wasn't driven by its marketing department])
- competing news services have been done (and MSNBC has turned into more of a political vehicle than a better news source)
- competing game consoles have been done (and XBox reported a loss last year)(Yes, it's a better product. But development is stifled because marketing wants their cut before you're even allowed to code for the darn thing.)
- Competing content providers has been done (AOL is still #1).
- Competing Instant Messengers have been done. (All of them tend to be my #1 headache security-wise.)
At the risk of driving my coworkers into seizures by my restating this, MS Office is a very nice product. Ignoring the security problems, there is very little to compare with it. But remember, they were in at the start of that race. Everything else since then (including networking) has failed supplant competitors.
Since Microsoft's marketing practices, of late, appears to view everything as an "income stream" (including Joe Sixpack users)(Can you say "license subscriptions"?), stand by for a LOT of hype following the release of, at best, a fair product.
To compete with Google and it's half-doze or so cousins, MS is going to have to come up with a better product (without infringing on Google's code). About the only way I think they can improve on Google is to use all of those idle processing cycles on the user's desktop. All it would take would be a slight modification of the EULA and MS would have the "right" to use them. That or some really nasty marketing/legal/political actions.
I wonder what they're up to. And how much of a security nightmare it's going to be.