What will happen to Microsoft?

The last couple weeks have been filled with news on Microsoft. Microsoft attempts to acquire Yahoo! Microsoft invests $3 million in the development of healthcare applications. Microsoft gives away high-end software development tools to college students. Microsoft takes sides in the high-def DVD format war. Microsoft may partner with Netflix.

Microsoft was famously late to the Internet business, and has always lagged behind one online giant or another, whether it be Google, AOL, Yahoo!, take your pick. Now, as many people begin shifting their digital lives from their desktops to their homepages, online applications of the Google Docs variety have the potential to eat away at the supremacy of Office. Now, the European Union has slapped Microsoft with a $1.3 billion fine for noncompliance with a 2004 antitrust ruling.

Says the AP:

EU regulators said the company charged "unreasonable prices" until last October to software developers who wanted to make products compatible with the Windows desktop operating system.

The fine is the largest ever for a single company and brings to just under $2.5 billion the amount the EU has demanded Microsoft pay in a long-running antitrust dispute.

Microsoft immediately said the issues for which it was fined have been resolved and the company was making its products more open.

The fine comes less that a week after Microsoft said it would share more information about its products and technology in an effort to make it work better with rivals' software and meet the demands of antitrust regulators in Europe.

The last part is the interesting one. Microsoft famously held out the olive branch to open source last week, offering to give away its API specs to Linux developers. As a result, open source alternatives to MS applications just got a lot more competitive. And that was before today's announcement: Sun Microsystems just acquired the open source database software company, MySQL. For the non-techies in the audience, MySQL is a big part of the juice behind many content management systems on the Internet, the software foundation that makes media websites run, from your Wordpress blog to the New York Times' site. Sun Microsystems, a company with a firm commitment to open source development, will form a healthy environment for a venture like MySQL, giving it bigger and better resources than its ever had before. And how is Sun selling the idea to the public?

Says the Mercury News:

The company touts [it] as a dramatic upgrade in creating an open-source software platform that represents a full alternative to Microsoft's proprietary technologies.

That's right. Everyone's piling on Microsoft. Lots of analysts are questioning the wisdom of its bid for Yahoo!, suggesting that money can't buy what its 1990s lack of foresight in adapting to the Internet may have lost it. And on the desktop front, early user reactions to Vista have been mixed. Apple's operating system, while light-years from market dominance, is finally picking up a little mojo, and every few months there's a story about how Firefox is gnawing away at IE's continuing Internet reign.

MS is such a behemoth that I don't think I could in good conscience predict its demise—or even give a good idea of what will happen to it. And certainly it still has a lot of ventures that are going well. But open source and web-based alternatives certainly seem to be getting more popular and their outlook rosier. What do you think, wise readers? What's your take on the future of the Start button?