Microsoft owns the desktop. At one time it owned the command line, the C:\ prompt, and now it must own the command line that connects away from the desktop to the Internet.
This is the core of what Microsoft is about, its unstated mission statement, and this was why Microsoft had to react quickly to the threat posed by Netscape.
Google owns the command line to the Internet and Microsoft cannot afford to concede that to them. That is why they may indeed have explored buying Google. Even if the reports of this are not true, as is probably the case, the rumor itself signals a warning shot that Google are on Microsoft’s turf and so perhaps lowers the price that they could buy them for post IPO.
Google is set to battle two giants, Microsoft and Yahoo. Google have the brand, Microsoft the ability to put search directly into the computers that people buy and Yahoo have the portal extras that are very difficult to introduce without losing focus.
Google, who has done everything right so far will do everything it can to avoid becoming a Netscape to Microsoft and an Altavista to Yahoo. It will need to lock in customers by making it difficult to switch rather than relying on brand alone.