John Montgomery writes about Microsoft's Popfly service for mashups:

# It's easy to get. All you really need is Firefox 2 or IE 6 or 7. Oh, and Silverlight, but that's pretty easy to get.
# It's easy to use. People have talked about wanting programming to be like connecting Lego blocks; Popfly gets pretty close.
# You can create mashups with it. This is kind of its purpose, but it's neat nonetheless.
# You can create web pages with it. We "borrowed" the Office Live team's page editor technology.
# You can use it with Visual Studio. If you're a VS user, you can get Popfly Explorer and start to share projects with your friends on Popfly.

Kara Swisher provides the context:

1. Spending by big advertisers online lags well behind what many call “audience engagement.” In other words, time spent on the Web has obviously been growing and taking share away from traditional media.
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2. The time to act, then, is now, to lock up any and all available assets in this space, especially ones that give the buyer a big market share and critical mass. The three biggest online ad players, Google, Microsoft and Yahoo, have snapped up the three biggest independent online ad agencies.

3. As more ad spending shifts online, the ability to have expertise and to innovate quickly will become critical. What all these companies are buying–besides stronger relationships with advertising clients–are people and experience.

4. Most of all, there was no way Microsoft was not going to answer Google after it bought DoubleClick, especially if it wants (and it does) to stay competitive with the search giant in the online ad market.

Henry Blodget writes about the differences:

One reason Microsoft has struggled for twelve years with its Internet business is that it has always managed the business with an eye to protecting and/or augmenting its core desktop monopoly. Microsoft's competitors, meanwhile, have approached the Internet business with an eye to doing whatever is best for the Internet business, desktop monopoly be damned. And now that it is clear that the Internet business is going to compete with the desktop business, Microsoft finds itself in an even stickier situation: How can it do what it needs to do to win in the Internet without hastening the demise (or at least slowing the growth of) the desktop cash cow?

GE can compete in dozens of different businesses because it is a true conglomerate: Each division is free to do whatever it needs to do to win (and the divisions also aren't that competitive with one another). At Microsoft, meanwhile, all the sideline divisions exist to protect or augment the major businesses, and Microsoft's Internet team has to work within this system. For Microsoft's Internet business to have a real chance to win, it has to be able to launch wholesale attacks on Microsoft's core business. And it's hard to see that happening within the Redmond corporate structure as currently defined.

Om Malik writes:

Windows Mobile, which is one of the two future platforms of growth for the company. (Xbox is the other.)
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While it is unlikely that I would switch to Windows Mobile anytime soon, I have seen how some friends of mine like the platform. In fast growing mobile societies like India and China, Windows Mobile devices are popular despite their high price tag. Many use Windows Mobile (and other phones) for what we view as computing tasks in the US. It is their computer.

Microsoft has to work hard with device makers to bring the prices down to $100-a-pop range, and see its market share zoom. Microsoft’s relevance (and more importantly future profits) in these new mobile societies are going to come from mobiles, not PCs.

TechCrunch writes about Microsoft's newest launch:

When Silverlight was first announced two weeks ago, it was all about a platform that could run a subset of XAML to provide graphical and event-driven applications for the web - in short, a competitor to Flash. Today, only 14 days from the original announcement, Microsoft has officially announced that Silverlight will also contain a compact CLR, allowing developers to build desktop like applications on the web in a number of supported programming languages.
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Silverlight is excellent technology and those asking why developers and application providers won’t just stick to flash only need to look at XAML, the runtime speed and size and the flexible options with programming languages combined with very strong multimedia support to start to see the answer. Microsoft have a battle on their hands to convince the developer and designer communities that their platform is the best platform, but most of this convincing won’t be a technical showdown but rather the establishment of trust between users and Microsoft as the vendor of this new platform. That being said, Microsoft do have the largest developer community and the excitement from that community at the conference here today was very evident - so the question won’t be if there will be a killer Silverlight app but rather when, as Microsoft have given not just traditional Microsoft .NET developers but also many others a new playground in which to build very cool new apps.

News.com writes: " The software maker will offer the $3 Student Innovation Suite to governments that agree to directly purchase PCs for students to use in their schoolwork and at home. Gates plans to announce the program at a company-sponsored forum for government leaders. The collection of software, which will start shipping in the second half of this year, includes Windows XP Starter Edition, Office Home and Student 2007, Windows Live Mail Desktop and several educational products...Microsoft is hoping this program and others will help the company reach more of the 5 billion people who have yet to benefit from the PC revolution."

Paul Graham writes in an essay entitled "Microsoft is Dead':

What killed them? Four things, I think, all of them occurring simultaneously in the mid 2000s.

The most obvious is Google. There can only be one big man in town, and they're clearly it. Google is the most dangerous company now by far, in both the good and bad senses of the word. Microsoft can at best limp along afterward.
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[Ajax] was the second cause of Microsoft's death: everyone can see the desktop is over. It now seems inevitable that applications will live on the web—not just email, but everything, right up to Photoshop. Even Microsoft sees that now.
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The third cause of Microsoft's death was broadband Internet. Anyone who cares can have fast Internet access now. And the bigger the pipe to the server, the less you need the desktop.
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The last nail in the coffin came, of all places, from Apple. Thanks to OS X, Apple has come back from the dead in a way that is extremely rare in technology.
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Knowledge@Wharton talked to Microsoft's Ray Ozzie: "Computation is improving dramatically; we now have multi-core processors and soon we're going to have many-core processors. Storage improvements continue unabated. Broadband is becoming increasingly pervasive -- I want to say that respectfully to people in rural areas and others who don't necessarily enjoy the benefits of high bandwidth. But the fact that so many people have high bandwidth [lets] us figure out how to balance what part of an application should be in a data center -- somewhere "in the cloud" -- and what piece of that solution should be on a desktop or on a mobile device. The right balance varies based on the application...But that balance is far different moving forward than it has been in the past. When you have a very thin straw to a service, you tend to balance things differently than when it's a higher bandwidth pipe."

Ed Sim provides an overview of the day's action:

must say that I came away quite impressed by Microsoft's progress in its cloud and Windows Live strategy. Last year, all of the Windows Live talk seemed quite rushed, disjointed and forced and seemed it was more of a response to the market saying that Microsoft did not get the SAAS thing. This year the strategy seemed much clearer and well defined and the executives knew how the Internet and cloud fit into all of the various business units. In the end, Microsoft has made some huge strides and will certainly be worth watching over the next year.
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The consumer mobile breakout session was one of the more informative discussions that I attended. Basically as the world moves to three dominant operating systems for wireless (Symbian, Windows Mobile, and Linux), Microsoft will look to increase its penetration by leveraging an extensive development platform to allow third party partners to develop new consumer services which can be easily deployed via its worldwide carrier partners.

Paul Kedrosky points to a post by Roger Ehrenberg: "We may be witnessing an historic changing of the guard, which takes place in every generation. Remember IBM? They were invincible. How could they be beat? By a couple of geeks in a dorm room, that's how. Microsoft rises. And then another snot-nosed kid with a great idea and a dorm room made it happen in the box business, enter Dell. Then others got wise and squeezed their efficiency-based margins to nothing. Apple rose like a phoenix, crashed and rose once again, by virtue of innovation and a customer-centric ethos. Sony was like IBM. Now they've been bloodied by the customer-centric and community-oriented Nintendo. And now there's Google, the poster-child for the democratization of the Internet and the ever-flattening, increasingly frictionless world. When put in this context Microsoft just seems so big and slow and old, hidebound by 30 years of culture and organizational silos that seem impregnable. And it appears that Vista - the product, the PR, the marketing approach - is the result of such an organization. At times brilliant, very heavy, complicated and expensive. This is not a product for today. This is a product for an era when the desktop ruled. And that era is long gone. "

The New York Times writes:

Running a storied enterprise like Microsoft — software heavyweight, geyser of cash, corporate icon — is about much more than energy and commitment, says Steven A. Ballmer, the company’s chief executive. It is all but a calling, an article of faith.

“You’ve got to be very realistic about where you are, but very optimistic about where you can be,” he said during interviews this month. “And the day you can’t be both of those things, you shouldn’t be a leader of a company like Microsoft. You have to believe; you have to believe; you have to believe.”

In the Ballmerian world view, failure is not an option. “If we don’t get it right at first, we’ll just keep coming and coming and coming and coming,” he says.

Steve Hilton has an amazing graphic.

WSJ writes about the 'Xbox whiz':

Now, with all of Microsoft's key entertainment groups reporting to him, Mr. Bach says his mission is to devise ways for them to work together without creating an unwieldy mix of technologies. Examples might include easier ways to use an Xbox or future Zune player to watch online videos, or a mobile phone to access wirelessly music stored on a PC, say Microsoft insiders.

At a five-hour annual strategy meeting on Dec. 14, Mr. Gates pushed Mr. Bach's team to speed up its connected-entertainment plans, Mr. Bach's lieutenants say. "They want us to move as quickly as we possibly can," Mr. Bach says. "Apple has a lot of market share -- we need to move quickly. Our share in the cellphone space is improving and growing but we need to move quicker there. Even in videogames, there's still plenty of unfinished business there."

Guardian has an interview with Jeff Raikes of Microsoft:

If you poll Office users, there's a couple of things that really stand out. One is that they really see that Office is very important to what they do in their jobs, so they care a lot about it. The second thing is that they'd like to be able to do even more. They recognise there's a lot of capability in the product that they're not getting to today. So the research that we put into designing the user experience was to address that issue: to help folks get to more capability and get things done faster and easier. Our research shows they can use 65% fewer keystrokes and less mouse-travel.

People want a results-oriented interface: they want to get things done. So that's the most notable step with Office 2007.

Robert Cringely writes why Microsoft will win:

Those who are trying to figure out if Vista will be successful haven't yet grasped the concept that Vista will be forced on the market, and in time it will be the only operating system you can buy from Microsoft. Of course it will be successful. Will people upgrade their existing systems? Of course not. Microsoft operating systems are always designed for future PC's, not for the installed base. Part of the plan is to make Vista work poorly on current computers so we'll all have to buy new ones. This strategy has been around for years and there is no reason to believe we won't fall for it again. Sure, some percentage of people and firms will upgrade, but most of the upgrades will come with whole new computers.

Think back to the Windows 95 introduction, where one of the selling points was that the new OS would work fine on a 66 MHz 486 computer. The truth was that it would RUN on a 486, but not well, so after a try of Win95 on our old hardware, rather than go to some other operating system we all bought new machines. And we'll do that again with Vista.

Business Week writes in a cover story:

Maybe the point is that Microsoft needs to find its un-Vista. Several of them, in fact. The software giant is entering perhaps the greatest upheaval in its 30-year history. New business models are emerging--from low-cost "open-source" software to advertising-supported Web services--that threaten Microsoft's core business like never before. For investors to care about the company, it needs to find new growth markets. Its $44.3 billion in annual sales are puttering along at an 11% growth pace. Its shares, which soared 9,560% throughout the 1990s, sunk 63% in 2000 when the Internet bubble burst, and they have yet to fully recover.

Reigniting growth will require a cultural shift at a company that has long shaped its strategy around maintaining its Windows operating system and Office word-processing and spreadsheet monopolies. That calls for a new breed of leaders who can push the company in directions it hasn't gone before. "Things are different from the desktop world that most of the Microsoft guys grew up in," says Michael A. Cusumano, a management professor at Massachusetts Institute of Technology who has written extensively about the company.

WSJ writes:

Today, Microsoft is making up for lost time. It now has a fully staffed sales force on par with the rest of the Internet industry. It's investing in a broad range of services for placing ads on the Web, in videogames, on mobile phones and alongside Internet search results.
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Online advertising has emerged as the foundation stone of a whole host of new Web businesses. Research eMarketer forecasts that the market will balloon to $25 billion in 2010 from $15.9 billion today. As a result, Microsoft has started to learn what makes advertisers tick as a way to get deep into a business that's as much Madison Avenue salesmanship as Silicon Valley genius.

Techcrunch writes:

Earlier this week, Microsoft’s Xbox 360 division announced partnerships with CBS, MTV Networks, Paramount Pictures, Turner Broadcasting, UFC and Warner Bros. Home Entertainment to “Digitally Deliver TV Shows and Movies to Gamers.” This is Microsoft’s first move into digital movie and TV show sales — and is also another move towards turning their Xbox gaming system into a full-fledged digital entertainment system.
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Microsoft has a serious strategy to dominate digital entertainment. Microsoft already has a very successful gaming console (Xbox 360) that allows users to play games, watch movies, buy movies, buy TV shows, stream video from their computer, stream music from their computer, and I’m sure buying music from URGE is in the gameplan — not to mention the social networking features that allow Xbox 360 users (and maybe Zune users, considering the wi-fi built-in?) to chat with each other in games, send messages to each other, add users to their friends list, etc.

Walter Mossberg writes:

This first Zune has too many compromises and missing features to be as good a choice as the iPod for most users. The hardware feels rushed and incomplete. It is 60% larger and 17% heavier than the comparable iPod. It has much worse battery life for music than the iPod or than Microsoft claims -- at least two hours less than the iPod's, in my tests. Despite the larger screen, many album covers look worse than they do on the iPod. And you can't share music libraries between computers like you can with iTunes.

Zune's online store offers far fewer songs, just over two million, compared with 3.5 million for the iTunes store.

O'Reilly Radar writes about Microsoft's new 3-D services as part of Virtual Earth:

Microsoft released an amazing, computer-generated 3-D mapping site via the Virtual Earth team. Spaceland, as it's called, is quite beautiful and available in 15 cities. It can be used for driving directions, searching, and real-time traffic monitoring.
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Spaceland utilizes technology from the GeoTango and Vexcel acquisitions. Vexcel is a GIS data collection asset for MS. They use their advanced UltraCam to gather the data used in the models. This was the data collection part of the equation. That's right, MS is now gathering their own GIS data.
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As has been widely reported, Microsoft is experimenting with ads in its new 3-D GIS playground. These are supplied by Massive, a company that was originally serving ads in games and from Microsoft's homegrown ad platform.