So Paul Graham announces Microsoft is dead, we knew this. It's just never actually going to die. But if you are a new young entrepreneur and looking to start up a business, who do you worry about? Google. I've ditched at least a few ideas knowing that there's no need - Google will turn around and do it soon enough. It used to be Microsoft, build it and sell it before Microsoft notices you and comes a visiting (eg. NCompass).
Think of that idea, build it and get it out before Google come's a looking and hope they buy. The main difference's of course, everyone likes and uses Google's stuff. Apart from UI (come on Limi) they rock, Microsoft, never really.