I always thought that Google made a big blunder by not encroaching upon Microsoft's turf more aggressively. They should have tried to make a better desktop OS (just buy Canonical or something) and then eat into Microsoft Office market share by releasing Google Office for Desktop. Wait for an opportunity to emerge and then pounce. This is precisely what Microsoft did to Google. They had Bing running in the background…
It's their outdated search bringing everything else down it seems.