Interesting BusinessWeek cover story; start on page 1 of the 4-page article
For Ballmer, this isn't just about taking Google down. Indeed, it's hard to overstate how important it is for the company to master online advertising. While Microsoft is phenomenally profitable today, adding $1 billion each month to the cash hoard from its lucrative software business, it faces a serious long-term threat. The company's fortunes have been built on software that runs on PCs, especially its Windows operating system and its Office word-processing, spreadsheet, and e-mail programs. But that kind of software is beginning to shift online. People with pretty much any kind of computer can go to the Web and use applications for things like word processing and communication. The programs are typically available for free, funded by online advertising. Google is offering a number of these programs, and there are a flock of others doing the same, such as upstart Zoho.