Last week we wrote an article about GoogleÂ? and what they have been up to as of late. We went over some of the more recent releases from the search giant, looked at how these releases were doing compared to competing products, and how they were doing compared to the rest of Google’s Properties. Much of the article focussed on comparing Google to Yahoo!, and we ended with the question: ‘Where is Microsoft in all this?’ Quite the foreshadowing for this post.

Back in April, we wrote a post about Microsoft and their bold moves to solidify themselves asÂ? an online company as much as they are a software company. The move involved the addition of Ray Ozzie, and eventually, the announcement by Mr. Gates that he would be slowly limiting his role with the company until his eventual retirement in 2008. At the time, some of the pieces to the puzzle included Windows Live, Windows Live Local, and Windows Live Expo. With a growing list of releases under the Live brand, is Microsoft putting together the pieces that will guarantee the future success of the company, or is this merely delaying the inevitable end of this dinosaur of a company?

For any online company, and pardon the inclusion of the greatly overused term, adopting Web 2.0 standards at some level is going to be a key to success. If nothing else, any company that chooses to remain a Web 1.0 company will have to face new competition by a company willing to do the same thing, only with Web 2.0 in mind - just look at Tim O’Reilly’s comparison of Web 1.0 and Web 2.0 examples. For Microsoft, MSN is Web 1.0 and Live is Web 2.0.

As services are moved over from the MSN platform to the Live platform, the flexibility of the service is greatly increased. For example, the Live.com homepage is almost completely customizable.

What is Windows Live?

Your online world gets better when everything works simply and effortlessly together. That’s the basic idea behind Windows Liveâ„¢. So the things you care about […] come together in one place. This is a brand new Internet experience designed to put you in control.

Live is starting to incorporate your typical desktop applicationsÂ? into the mix, with Microsoft OfficeÂ? Live BetaÂ? and Microsoft Live Mail BetaÂ? offering two of Microsoft’s staples as free, online applications. The Live platform delivers these services with heavy doses of Ajax, giving the feel of desktop applications that people want, but with all the benefits that come from being online, like universal accessibility.

But how can this really benefit Microsoft? The financial potential of advetising is far greater than that of software sales, but the userbase must be available to tap into. Although MSN SpacesÂ? (releasing today as Windows Live Spaces)Â? and MSN Messenger (or Live Messenger Beta) do provide potential userbases, users of these services are almost never 100% loyal to the service. Offering their software online for free gives stronger ties to users, and makes them less likely to take advantage of competing services since the entire package is offered at Live.com. Live.com is Microsoft taking the Big Box Retail approach to their website, and it makes sense.

Advertising makes more money than software sales, and the ratioÂ? between online spendingÂ? and online advertising will correct itself in the next few years. By increasing the number of dedicated users (those that visit the site daily or at least several times a week) and increasing the amount ofÂ? time spent each visit,Â? Microsoft will be able to better capitalize on this shift.Â? While the negativity builds around the release of Windows Vista, Live has put together a useful package of online applications, and although several of them are replicas of those released by their two main competitors, Yahoo! and Google, these releases are still good. They even include some interesting twists, like theÂ? Bird’s eyeÂ? view on Windows Live Local. And while companies like Google try and convince people to use their new products, Microsoft only needs to convince people to continue to use the products that they’re familiar with, only online and for free.

Although Microsoft always seems to take a lot of abuse, the Live.com initiative seems to be moving along quite well. Two recent releases, the Live Messenger and Live Spaces, will be key to the continued success, and as Michael Arrington said in his post, it will be interesting to see the comscore numbers for Live Spaces in a couple months.

Live.com and its properties may actually be enough to keep Microsoft alive.

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