Bill missed the Internet entirely (read his book from 1994), then tried to kill it (client/server is still The Way), and now is continuing his attempt to buy it.

I suspect that no one at the top of M$ understands the Internet to this day, because they don't understand why human beings like it so much (freedom, free-dom). Another fundamental flaw at the top is Bill's viewpoint of human intelligence outside M$. All the evidence you need is a product called "Microsoft Bob". He thinks we are a bunch of Forrest Gumps compared to him. This leads to continual miscalculations of the market and competitors, and a constant trying to catch up.

The only way M$ has proven they can catch up is via acquisition of product or talent (NT came from the VAX/VMS design team, another "acquisition"). The problem they face now is that the online world moves too quickly for that strategy to work long-term. Web 2.0 and free Office apps will evolve faster than M$ can "react", never mind search and advertising.

If Yahoo can resist (which I doubt if the price gets near their target), it would in fact be a major turning point in history for M$. It will be the first time they failed to buy their way into the present from the past.

20 years from now, we'll see some very interesting studies done on M$ from a sociological standpoint. I hope to still be around to read them.