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The internet is not *the* platform. It's the transport. But the internet as a platform also needs the servers and the clients. Obviously they have the servers and the expertise to spit out a bunch of HTML and Javascript, but they are still reliant on client technologies that they don't control - with Microsoft owning the most important one.
Does the future (post 2.0) mean that Google will detect the browser and either send XAML or XUL depending?
But in any case, you can't just leave out the client and say "the internet" is the platform.
What you seem to be forgetting is that "the internet" isn't limited to desktops. There are many many devices capable of being on the internet namely cellphones, psp, etc. etc.
By limiting your thinking to desktops, you're limiting the possibilities of what google can offer. And microsoft wants more of the other markets that it doesn't control. Notice if you will that they are constantly trying to gain a foothold into the mobile market and of course the "other devices on the internet" market.
Google owns the search engine market and slowly the online maps market and webmail market. A few of the thing Microsoft is trying to do with MSN. Eventually with Vista MS wants to merge the online and desktop experience. The only thing standing in thier way is google because people choose google over MSN and do so everyday.






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I think a lot of people just don't have enough insight. Google writes applications that use a platform, the platform being the internet. Microsoft write software for their platform, the platform being windows. The internet is maturing as an application platform and is becoming capable of achieving tasks once only viable on the dektop. Now the internet will eventually take the concept of desktop software such as email clients, word processors, spreadsheets etc under its wing. The more of these applications move onto the internet, the less of a monoploy MS has. Pure and simple.
It becomes the whole "the network is the computer" thing that Sun has been pushing all these years, if the internet is an open platform then MS has a problem.
cheers.
che