Subtract just half and you can see MSFT is an empty paper tiger. Overspending on way overpriced acquisitions and look at the Corporate losses activity. Something stinks on the MSFT balance sheet. Goodwill exploded in the last few years.
From an industry perspective, this makes sense. Vista and Windows 7 are non-entities at many companies. There's still a lot of XP out there, and most users prefer it (rational or no). Plus of course Linux is eating away the technical user and cheapskate markets, and apple has the 20-something douchebag segment all locked up. It's not really clear what MSFT is going to have left at the end of the day. They may have to re-invent themselves a la IBM if they want to be profitable 10 years from now.
Much of Microsoft's 'goodwill' relates to the fact that over 90% of new computers are sold bundled with Windows. It's going to take something very dramatic to change that over the next 10 years - Dell (currently the world's largest PC retailer) offer a Linux package, but few people choose it.