In my best Dr. Evil voice: "350 MILL....I....ON DOLLARS!!!" That's right, folks. The web office application space is really starting to come to a boil (it was already pretty hot). Yahoo! just picked up Zimbra for a cool $350 mil.
But wait. There's more!
IBM also announced a free, online suite of office applications. Just last week IBM announced that they had joined the OpenOffice.org team. This is so reminiscent of their Apache strategy (which worked by the way) that it's scary. IBM really understands how to leverage the open source community and still manages to earn a buck or two at the same time. It's really amazing. Here's an article from 2004 that sums it up pretty well.
Where is Microsoft in all of this? They are not bowing out. Far from it. Yet, my impression is that they are still stuck with an old guard mentality. The web office applications that I have been trying over the past year or so seem really light and natural on the web. Microsoft is simply trying to adopt their office suite to a web medium. Is that the best approach? My instinct tells me no and time will tell us whether or not I am correct.