Is Microsoft quietly on the march to crush some of the upstarts in Silicon Valley such as Google, Facebook, Salesforce???- I wouldn’t call Google and upstart. While many are calling Microsoft done…they might be on a strategic quiet war… unlike 1996-97 the world is transparent and the techniques Microsoft used then to kill their enemy won’t work now.
Keys to success for Micrsoft resource based competitive advantage: 1) provide countermeasures against the areas they have lagged and 2) offensive on new areas to dominate.
Countermeasures must allow them to stall and get a position on the following areas: open source, advertising, search. Offensive must own the new ‘developer’ areas and new market areas like global web services and media.
If Microsoft loses the developers they are ‘toast’.
Silicon Valley Technology Blog - John Furrier 
Microsoft is too late to crush these startups, if I may. Google is the largest third company in USA now. Also in the CRM space many smaller players such as Salesforce.com, Netsuite, RightNow and Salesbooom.com are innovating in a space that they created. Microsoft not only will they have to innovate, but introduce new things too.