Referring to the cnet news, microsoft is struggling for better results due to their competitor google, they have already tried out with window live for ad-backed businesses but no success so far.
The revenue was expected to grow by as much as 11 percent, the company now sees full-year sales growth in its Internet services business of just 8 percent from 3 percent.

“Success continues to elude Microsoft in this market,” Technology Business Research analyst Allan Krans said in an e-mail interview. He said Microsoft is hardly alone, with other rivals also struggling to keep pace with Google.

“Given Google’s large head start in the market and its ongoing momentum, we think it will be very difficult for Microsoft to have a real impact in the online search market during 2007,” Krans said. “However, Microsoft continues to take a long-term approach to this market, and plans to keep the investment dollars flowing into its ad business.”

Microsoft CFO Chris Liddell added in response to an analyst’s question on the company’s earnings conference call “On the search side you are correct we lost market share,”. He said he is “clearly not happy with that.”

I think this is high time for microsoft, they need to redefine their business strategy and leverage best practices to prove and improve to meet their overall financial goal and prepare to face the challenge with their prime rival Google.