Earlier quoted context omitted.
"I'm actually afraid of the collective ignorance of most computer users today that Microsoft could win out with manipulative business practices like this - most internet users are layman and don't understand the integrity issues of whats going on here." OK, so let's assume this will work, for this reason, and game it out. I don't hold up the following analysis as Truth, just some thoughts. In the short term, even for…
Tiny nitpick: Microsoft was the 8th most profitable corporation in the world, last year. I am sure there are a lot of products that they sell extremely well, besides Windows / Office. Also, while they may not have produced many successes over 3 decades of platform wars, they have certainly ruined many competitors.
Other things may "sell" well, but nothing else makes money.
That's how profitable Office and Windows are.
Incidentally, if you've ever wondered why Microsoft is so willing to go to bat for Windows or Office lockin, this is why. They are a mighty edifice built on two things, and if either one of them fails they are in for a world of hurt. This does put them ahead of Google, though, which is a mighty edifice built on one thing, ads.
This probably also explains why Microsoft might be willing to pump a lot of money into this task; cutting off Google's traffic cuts off their ads, which cuts off their Windows quasi-replacement (their new OS stuff) and their Office replacement (Google Docs). If Google was just sitting there, raking in dough from online ads, but had no OS or Google Docs, Microsoft would probably be content to just watch them, but Google really is a huge existential threat to Microsoft, who really is in a much more insecure position than it may seem if you just read the bottom line on the balance sheet.