Microsoft does plenty of innovation internally, but it also buys promising companies; products from PowerPoint to Halo started elsewhere.
Recently it's absorbed trendy search start-up Powerset and rumour says it will buy Israeli 3D gesture experts 3DV.
Despite the credit crunch there's no shortage of good ideas and plenty of new companies starting up to turn them into reality. So, who else should Microsoft whip out its cheque book to acquire?
Windows Mobile is lagging behind; there's no sign of version 7, no firm date for the welcome but minor improvements in 6.5 – and no-one gets Internet Explorer Mobile 6 until then. You don't have to wait for full web browsing with Flash, Silverlight and all the trimmings if you get Skyfire, though, and Microsoft should get it while it's still in beta.
Unlike most mobile browsers, Skyfire does the heavy lifting on the server, and Microsoft has its Azure cloud computing platform almost ready to go. Skyfire would put Windows Mobile ahead of the iPhone for browsing and it would be the perfect proof of concept for Azure; two birds with one investment.
2. Sense Networks
Microsoft wanted Yahoo to compete with Google on search because of all the money available from advertising on search results. The next big thing is mobile search, where Google isn't making a dent. This is a trickier problem because when you're on the go adverts have to be much better targeted to interest you.
Sense Networks's Citysense (www.citysense.com) could do that; it combines travel data from taxis and GPS-equipped mobile phones with demographic and business information to categorise locations – and the type of people who want to travel between them. If I'm a trendy clubber I don't want offers from a Harvester; if I'm looking up Toyota information from a Ford dealership, I'm ripe for an advert but probably not for a people mover. Sense says it can work all of that out without you ever signing up and filling in a profile, but it needs Microsoft's deep pockets to expand worldwide.
CITYSENSE: Working out what you like from where you go. Sense Networks could give Microsoft a step-up in mobile advertising
Windows Media Center is starting to take off at last and the combination of new features and internet TV support in Windows 7 Media Center should give it a boost. Social media start-up boxee has just come to Windows, combining streaming media like Last.fm, YouTube and BBC iPlayer, online TV channels like CNN and Comedy Central (at least in the US) and sharing sites like Flickr with a media centre interface of its own. Microsoft should buy in boxee for the extra features and run it under the rather slicker Media Center interface to give you all your entertainment in one place.
Controlling your TV by pressing buttons on a remote control is fine, but when you have hundreds of music albums and videos and thousands of photos it would be nice to tell it what to do. This Northern Irish start-up was a big success at CES this year with a voice recognition remote control for Media Center, but the Amulet name reveals bigger dreams; a tiny remote you could carry around to control your PC from anywhere in the house by issuing your orders. Microsoft has strong speech recognition technologies that could move Amulet along; bring the developers in-house and Microsoft could put Media Center years ahead of Apple TV out of the box.
The kind of cool app you expect to get on iPhone or Android, Kinoma Play calls itself a media browser rather than just a player; you get the same slick, fast interface for videos, music, podcasts, radio, audiobooks and photos whether they live on your phone, on your home PC, on a website like Flickr or a streaming service like SHOUTcast. If it's good enough to be the anchor application for Windows Mobile Marketplace, it's good enough for Microsoft to buy to replace the primitive Windows Media player on Windows Mobile.
KINOMA: A powerful, simple way to play music and video that's on your phone, on the web or on your PC. Microsoft should replace Windows Media mobile with it
You love the TechRadar newsletter, but how many of the other email newsletters in your inbox ever get read? You sign up because you want the offers, but you only want to read the most recent message when you're thinking about buying, you don't want the old messages cluttering up your mailbox and you certainly don't want to take the time to delete them.
Email isn't really the right place for search alerts, travel alerts, weather predictions, notifications of auction listings you're watching or anything else that goes stale. Ingboo puts it all on a portal that you don't even have to sign in to use; it's like Facebook for web pages or IE 8 Web Slices without having to wait for websites to build slices (or you having to switch to IE 8) and it would liven up Live Search a lot more than the Kumo redesign.
It's a feature Outlook should already have and if Microsoft doesn't want to build it, it should buy it. When you get an email with someone's name and address at the bottom, why do you have to put them into the Contact fields by hand, one by one? Gwabbit 'gwabs' all the details and puts them in the right place, so labelled phone, fax and mobile numbers are ready to dial. It's not the first tool to do it (Anagram has been around for a while), but it's polished – and Microsoft could buy it now and build it into Office 14.
GWABBIT: Stupid name, clever software. Microsoft should build Gwabbit's address-nibbling teeth right into Outlook
And while Microsoft is shopping… Skype
It's not a start-up but given that the founders want to buy it back and eBay doesn't seem to want to keep it, Microsoft could step in and broker a deal to get the most serious competition for Windows Live Messenger (or whatever it's called this week). On the business side, Skype would be an excellent fit for Microsoft's unified communications strategy; a powerful comms client optimised for voice instead of just text that plenty of people already understand how to use.
Article continues below