By contrast, as hard as Microsoft has tried with MSN and its confusing Live announcements, it hasn't done very well at either: Its search services are mediocre, and its Live OneCare antivirus software has famously failed a couple of tests recently.
As far as I can see, Microsoft will never have any success in Web-based, advertising-supported services for two reasons. First, it doesn't trust the model -- Microsoft is unwilling to give away for free any service that might be really useful. And second, it doesn't trust its customers.
Look at Google. The Google search service crushes any competition in Web search, and the reason is simple. It is excellent. And that willingness to do whatever it takes to be excellent runs right through the company. Google's products (and there are many, despite Ballmer's sneers) are, for example, more open than anything Microsoft ever thought of doing. You want to do something clever with Google Maps? It's easy. There's a programming interface you can use. You want to create a blog or turn your photos into a slide show for your mother or share a calendar or create documents? Google's got a Web-based service for those things and many more.
And what's your relationship with Google? Simple. You use what you want. If you like the value you use more. If you look at the ads, fine, they never intrude. Google provides good service and says thank you with good value.
And Microsoft? It wants to compete with Google. So what does it make available on the Web that competes with Google Maps? Some nifty maps and aerial views, but they aren't nearly as usable as Google's; there's no API for building apps on top of them. (Update: Mea culpa. Of course there's an API. See comment below.) Microsoft publishes the most widely used text editor, spreadsheet, and presentation application on the planet. It should be able to do Web-based productivity better than anybody, but it doesn't. Google Docs & Spreadsheets wins by a mile.
And what's your relationship with Microsoft? You pay for its software, and then periodically it accuses you of stealing it and makes you prove you're not -- and eventually it quits supporting its products anyway and forces you to pay for new versions. And does it ever say thank you?
It's no wonder Steve Ballmer is trying to trash-talk Google to death. His rant yesterday seemed to be aimed at spreading conventional Microsoft FUD, perhaps to convince Wall Street that Google is just a flash in the pan, a one-trick pony. Or perhaps he's trying to taunt Google into doing something that's not in its game plan. Or maybe he's just trying to convince us all that Microsoft doesn't care about search or ad revenue after all. But all he succeeded in was convincing us that we've heard it all before.