May be do an IBM and go after niche markets that pay well?
I hate to say this, but they have an good research department. Some products, like the kinnect aren't half bad. They may not make the billions a year they do now, but they sure as hell can go do something useful and awesome than be jerks going around suing people.
I don't think Microsoft's primary worry is Internet business at the moment.
Their primary worry is mobile computing, and Android and iOS seem to ruling at the moment, the future is really bleak for Microsoft. And they want some internet services like search, news and email ready when they actually make it big in mobile areas(If at all they every make it big).
So at max MS would be looking at internet services as a catalyst to be ready to get into the reaction at the right time.
I hate to say this, but they have an good research department. Some products, like the kinnect aren't half bad. They may not make the billions a year they do now, but they sure as hell can go do something useful and awesome than be jerks going around suing people.