Microsoft Moves Office to Online and for Free

Microsoft is in a very tricky spot as the traditional PC market "diffuses" into other categories. That loose diffusion into other devices such as cars, TVs, appliances means that Microsoft's main franchise is vulnerable to a technical transition. Additionally, people that use their computers simply for email and Internet browsing will be tempted to use something a lot more scaled down entirely.

Google Chrome will hit these people especially hard because they are more than content to run their applications from a browser based OS since that's what they use their computer for mainly anyway. To the extent that the browser that browsers become the application platform Google can at least take some share.

This was the driver for my predicting back in December that Microsoft was in a long term decline and while tech would outperform for 2009 I was concerned about the company. Here is prediction #5 from December.

5. Tech companies are among the first to rebound with Microsoft lags as it begins a long secular decline. Palm comes out with a fantastic new operating system that gets amazing reviews but eventually exits through a sale or wind down. Similar walking dead tech stories such as Motorola, Lucent, Yahoo, Nortel and Sun also finally exit through sales or wind down. It also ends up being the worst year in history for Big Media with the rise of new media and interactive entertainment. Big media can’t compete against much lower costs of content creation and distribution and one or more of these companies are forced to restructure.

I'm sorta giving the Miccrosoft part of that prediciton a "fail" because I've been surprised at how good Bing was, as well as Windows 7 and general weakness and lack of cash in the rest of corporate America (Microsoft is pretty much a big cash horde). I think ultimately the prediciton is only waylaid however because the company has no record of true innovation and transitions of things like Office to a web based format will be highly tricky and they are unlikely to pull it off. I plan to be out of the equity by the end of the year without new data. More from Gizmodoo.