Google? A competitor to Microsoft? Uh, not by a long shot. If anything, Microsoft has been able to compete with Google on its home turf (Internet search) while I have yet to see Google produce an operating system or business software tools. So far, Google has yet to produce a Second Act, while Microsoft has a long history of producing new products (and a few duds -- anyone remember "Bob"?). Yet Google's market cap is 1/3 of that of Microsoft. Yeah.
The Microsoft solution to a serious competitor is to buy them and ruin them from within.