Microsoft never ceases to amaze me. In case you haven't read the news floating around these last few weeks or listened to John C. Dvorak rant on Tech5 about this story, Microsoft is hoping to become an "aggresive player in online advertising" and hopes that eventually half their revenue will come from advertising. As John would say: "huh".
What does advertising have to do with their business? It would be like GM making hairspray!
I think most of us on the intertubes are becoming wary of Microsoft's efforts online. They suffer from the biggest case of "me too!" syndrome I've ever seen: If Google or Technorati or Yahoo or Chuck Norris are doing it, by their very definition they need to sink billions into doing it to, regardless if it makes business sense.
This kind of thinking worked well for them on the desktop, but to think the market dynamics online are the same as for shrink-wrapped software, and therefore require the same approach to marketing and development, they're really in over their heads.
As we've all said already, Microsoft should focus its efforts on actually producing decent operating systems and office suite software that people want to use. As an economics student I know all about the importance of diversification and spreading risk, but those are the things you concern yourself with once you have your core business sorted out. Given Vista's spectacular fall from grace (if it had any to start off with!) I think they should be more concerned with that right now. And that's not even mentioning their ridiculously low share price and middle management problems.
But what would I know, I run FreeBSD and Mac OS X right? ;-)