Is Microsoft losing their edge to competitors?

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@noslodecoy: Apple and Linux-based platforms compete M$ only in server/office/operating systems.
Now that you look how people actually use their computers, you'll notice that for most, they are only interfaces for storage and internet.
Now, for Google, it's irrelevant which platform are you using, whether it is Windows, Linux, Mac, Wii, PS3, PDA, DS, PSP, mobile phone etc., they still can offer you the same online services. With the virtual monopoly, PC came synonyme with Windows, just like internet search have became a synonyme with Google.
M$ is driving digital distribution for them to be the first and its own standards like Active X to have control on the internet and get Windows to be the standard platform for it. Since services will be more and more focused on the internet in the future and Google is successfully driving the Web 2.0, it's the biggest threat M$ have faced so far. The Playstation wouldn't pose a threat to M$, as long as it's perceived as a gaming console and all the PC software is done for Windows. But, since internet exists and the likes of Google can create their own platform/services, who don't need Windows anywhere, exists, now a Playstation with internet connection and a storage becomes a real threat. Imagine the day, when you buy an STB to watch digital channels works as your web interface and can store your photos/videos etc., or a day that a games console can do the same. There's a reason why 360 has online access only to a proprietary online platform, Live, instead of having full access to WWW, unlike Wii and PS3.