So how about Google? Microsoft has to give up it's obsession with research and duplicating Google technology. They need to focus on developing technology that is compelling.
There is of course an elephant in the Microsoft stable. Facebook. You may have heard of it they have a few hundred eyeballs under lock and key. They also have that ubiquitous like button that tells the advertisers of the world what you want and where you go to get it. Microsoft needs to aggressively increase their stake in Facebook. Targeted advertising is the way of the future and Facebook is the king of the space. Admittedly Microsoft doesn't do young and fun well which is why they should lit the nerds in Redmond to making ridiculous amounts of money on it while Zuckerberg and the kids keep it hip.
Microsoft could with ease do any or all of these things. Hopefully, they won't figure it out after the party's over. They've done that more than enough times.