Instead of focusing on the areas where Google has clearly won, they should work on their weak spots. There are dozens of Google products that range from mediocre to down right horrible. If Microsoft can move fast enough to get better alternatives on the market, they can ultimately beat Google and achieve world domination. Lets take a look at some of these products.
Google Checkout: Sure its a decent service but it hasn't received the amount of attention that Google hoped for. Microsoft can introduce its own payment system that has a better feature set than Google Checkout, which should not be difficult considering the minimal features of the latter.
In order to be successful, not only will Microsoft need to form partnerships with leading online stores, such as Amazon, eBay, etc. but also with popular pay services on the web. Imagine if you could pay for hosting, or domain registration, or a pro account on Flickr with Microsoft's service.
Another wishful feature, that I had originally hoped Google Checkout to have was the ability to earn and pay with the service, i.e. let users earn money through the new Microsoft adCenter, and spend that money directly on the web, no bank accounts or credit card needed. Of course Microsoft doesn't let us blogger earn with adCenter, the way we can with AdSense, but there's nothing stopping them from doing it. If Microsoft does decide to do this, then they'll be able to take out Google Checkout AND Google AdSense in one shot.
Google Reader: Reader is actually one of Google's best products, in fact its probably the best online feed reader, at least in my opinion. Then why am I calling it a vulnerable service? Because, unlike most of Google's products, this isn't innovative in any way, other feed readers just managed to go about it the wrong way and Google managed to do it the right way.
In order to build a competing product Microsoft simply needs to make sure that they keep the "river of news" view for the news items, and have a way to effective add, remove and manage the list of feeds. Other than that the product needs to have a clean and attractive UI, and needs to be fast. It would also be great if the reader has a desktop counterpart (ala Live Mail/ Mail desktop).
Google Docs and Spreadsheet: It's a relatively new product but has a lot of potential, and might ultimately overthrow Microsoft Office (but that day is far away) Microsoft's best bet would be to acquire Zoho Office to compete with Google's offering. Since Office Live isn't that popular, Zoho - with all its innovative features - could propel Microsoft Office to new heights.
Google News: This is a rather useful albeit simple service that I use regularly. Google News gives you a glance of the latest news as well as allowing you to search through the latest news, and recently not-so recent news. Since Google News has a rather bland interface, the most obvious way to dethrone it would be to introduce a service with a better interface. But thats easier said than done. The format in which news is delivered is rather complicated, perhaps the best way would be to use the traditional newspaper format, which is already employed in Microsoft's WPF News Readers. Microsoft even pull a digg on it and allow users to vote on which stories make it to the frontpage. All in one, this could be a good opportunity for Microsoft to build an innovative service but if not executed properly it could end up horrible.
Google Picasa/Web Albums: Picasa was once a much loved application but Google has neglected it for too long, churning out only minor updates every now and then. Microsoft can build a photo sharing service similar to Flickr, or perhaps simply acquire Zooomr or Smugmug, and build a desktop application around it (similar to
Nostaglia), and would be able to compete with Picasa. Also, if Microsoft manages to build/acquire a decent photo sharing service, it would benefit a number of other Microsoft services, like Live Spaces or even Live Image Search.
Unfortunately, Microsoft being Microsoft probably won't succeed in competing with Google in these areas. Already Google reigns over the search universe, and Gmail and Blogger are much better than Microsoft's Live Hotmail and Live Spaces (which, as a blogging platform is a joke).
Lets just hope Microsoft would someday be able to sort itself out, and return to its former persona of a ruthless corporation, crushing there competition like bugs. Whatever the case maybe, its a great thing that there is intese competition between these companies because ultimately the users (which is us) wins.
