Now, here's something I can agree with wholeheartedly. In fact, I had exactly the same reaction:

As I listened to financial analysts grumble about how Microsoft continues to pour its hard-earned software profits back into its online services effort, I couldn't help but think that maybe Microsoft is on to something.

Wouldn't newspaper industry analysts have had the same grumbles if the Gannetts and Knight Ridders of the world had poured a huge chunk of their profits into online ventures a decade ago at a time when their ad revenues were still enjoying healthy growth? And wouldn't they now say such a move, if well done, would have been brilliant?

If the biggest long-term threat to Windows and Office is free rivals and Web-based services, shouldn't Microsoft be using a significant fraction of its profits to develop its online advertising capacity?

Obviously, Microsoft needs to execute better on the Web. Pouring money into online ventures is only good if it produces returns. To date, Microsoft has not seen the kind of gains it will need to have to make it pay off. Some newspaper companies did, for example, build online job sites and auto sites and just weren't able to grab enough money to replace the ad dollars being lost. It's not enough to see the threat and try. To prove the grumblers wrong, Microsoft will have to do more than throw money online. It will have to win.

Bravo. Exactly.