Kevin Johnson has one of the hardest jobs at Microsoft: Figure out what to do about Google, whose advertising revenues recently surpassed Microsoft's gross sales from Windows, the software giant's top-selling product. In a series of interviews with Fortune, Johnson reveals that "Plan A" of his Google strategy was to buy Yahoo. Now that that didn't happen, it would appear that "Plan B" is to acquire the Web giant's search business. Microsoft is near the bottom of the advertising revenue totem pole, with a modest $2 billion in global revenues. Google, with $8 billion, is near the middle, but all …

In a lengthy interview, Google CEO Eric Schmidt reveals that "Web 2.0 architecture is not necessarily a revenue opportunity ... This is not where the money is," he says, marking the first time a major Web media exec has publicly suggested that certain forms of user-generated and social media may not be monetizable. Even Google's MySpace search deal, once thought to be a lucrative partnership, hasn't panned out the way Schmidt and other Google execs expected. "MySpace did not monetize as well as we thought. We have a lot of traffic, a lot of page views, but it is harder …

Google is only "partly right" in its public response to Viacom's $1 billion copyright infringement suit, during which the search giant claims that doing away with the protections of the Digital Millennium Copyright Act would unhinge many consumers generated content sites. On the one hand, it's impossible to ensure that all the content uploaded to user-generated content sites doesn't violate copyright law. Even if the technology existed to guard against this, BusinessWeek said it would be "prohibitively expensive." On the other hand, Viacom doesn't want to do away with the DMCA, it merely wants to address one of its …

In launching Live Search Cashback, Microsoft aims to disrupt the established search business model, cost-per-click. In essence, search guru John Battelle said Live Cashback is closer to the affiliate marketing model-in which merchants pay partners who send traffic to their sites a portion of the sales they generate. With Cashback, Microsoft's Live Search is the one and only affiliate, referring consumers to merchants' discounted products and services, but Microsoft passes along its referral fee to consumers instead of profiting from it. Another way of looking at it is to say we the consumers have become potential partners in Microsoft's affiliate …

Microsoft on Tuesday offered a first-look at Windows 7, the net iteration of its market-dominating operating system, at The Wall Street Journal D6 conference in Carlsbad, Calif. The Journal took the demonstration, which comes a year-and-a-half before the product's launch, as a direct sign that Windows Vista, which was launched last year, isn't performing up to Microsoft's standards. Taking a page from the Apple playbook, Windows 7 will use touch-screen technology, allowing users to use their fingers to manipulate software for tasks like drawing, photo-editing, and navigating digital maps. The technology also allows for multiple touches; for example, dragging …