But fed on the Windows and Office dollars, Microsoft actually seems to be pushing towards being a VERY significant player in web domain, if not the winner.
Talking in terms of web-search pie, Microsoft's Live Search is still distant 3rd behind Google and Yahoo, but consider this: While Google Search grew by 44% YoY iin terams of search volume and Yahoo managed only 20%, Live Search leapt by 77%. MS is also in fierce competition with Google in race of acquiring nice search providers (like MedStory,a medical provider)
And to Microsoft's credit, Live Search has also begun impressing cynics and critics. Though they had to tone down their radically new search interface, they still have managed to be somewhat better than Yahoo in this regard!
But what made me write all this is actually none of this!
Did you know MS has released its own mashup editor called Popfly(.ms! Heck they even got an DNS registered for that, there must be many others coming) and to run it you will need to install a Microsoft runtime called SilverLight? (Well I didn't know that till very recently and managed to get an invitation for Popfly. Whoopeee!!!!!!)
Which brings them head-to-head with Adobe, whose Flash has now become the de-facto standard for rendering RIA (Rich Internet Applications). This is what wikipedia says about SilverLight:
Microsoft Silverlight (code-named Windows Presentation Foundation/Everywhere or WPF/E) is a runtime for browser-based Rich Internet Applications, providing a subset of the animation, vector graphics, and video playback capabilities of Windows Presentation Foundation. Version 1.1 also includes a complete version of the .NET Common Language Runtime, named CoreCLR so that Silverlight applications can be written in any .NET language.
Simply put, Microsoft SilverLight is positioned against Adobe Flex, and Sun Microsystem's Java FX. Also note that they are making .NET more lucrative once again and positioning as a tool for developing RIA as well.
So while everyone is harping about Google's hyped entry in Microsoft's backyard of desktop applications, it seems Microsoft is working hard to reaching 'there'!