Microsoft Now Needs to Exit Online Services

5/4 - "What got Microsoft Corp. (NASDAQ: MSFT) started on its Yahoo! (NASDAQ: YHOO) takeover proposal was a fairly boneheaded idea that it could turn its money-losing online advertising unit -- known as the Online Services Business (OSB) which in the last nine months lost $775 million -- into a profitable contender to Google Inc. (NASDAQ: GOOG).

"At this point, the only thing that keeps Microsoft "investing" in OSB is pure ego. It can't stand the idea that another company -- Google -- has come along and created a new business that leaves Microsoft out of the limelight. But Microsoft has yet to prove that it can create a process that outperforms Google at giving advertisers better returns on their online advertising investment. So Microsoft has been steadily losing share.

Why it thought a combination with Yahoo would help is hard for me to grasp. If I owned Micros...