Robert, this particular mode of conversation was a great idea.  I can have your blog up on my left monitor while typing a reply into Channel 9 on my right monitor.  A technically crappy hack clears away some friction in the process.

Aha! Such a direct Segway, it's almost a Zinger! Wink

What should Microsoft do?

Clear away the friction and confusion!  You said it already, but I think your reference to Microsoft Office is the crux of the matter.  15 million people are using Spaces because it is easy (OK, it's free too, but so is the competition).

But clearly we are in the midst of another Internet revolution.  New things are appearing at a rapid rate.  Internet forums (like this one) are old, email is practically obsolete, IM is getting a massive overhaul, and so on.  Aggregated and digested content is king.

So to be relevant, or even to lead, Microsoft needs to make it easier to produce content for the new modes, needs to make it easier to aggregate and digest information and publish it out in these new ways.  Groove is neat, but that ain't it.  Neither is Sharepoint.

I hope Microsoft is agile enough to deliver something on that need.  Can the Word, Outlook, FrontPage, InfoPath, PowerPoint, Publisher, Excel, Access, SQL Server, OneNote and other teams get on board in a coordinated fashion?  Can they produce something neat and useful and forward-looking?  It sounds like the Manhattan Project of the New Web to me.

Good luck!