Microsoft continues to dominate the old world of desktop computing, but the future clearly belongs to Google. As reported by the Seattle Post-Intelligencer, Google's share of the search market now tops 59 percent, with Microsoft at 9.6 percent (and Yahoo! at 21.6 percent).
A combination of Yahoo! and Microsoft would give the two a more respectable market presence, but with both Yahoo! and Microsoft trending down, it's not a panacea.
Unfortunately for Microsoft and Yahoo!, Google isn't winning by closing out competitors. It's actually winning by opening up. Microsoft, to compete, must follow suit, but it's unlikely to do so anytime soon. Its attempts to reinvent the Internet wheel, rather than building from open-source components, makes it inefficient, and its attempts to lock in users to its complete stack are futile, as well.
Internet strategy is open strategy. That's the way to win.