I don't think Google cares much whether or not Google Docs ever replaces most MS Office installations. But it forces Microsoft to respond and protect their core business, and not focus on competing with Google in the markets Google actually cares about.
Meanwhile, Microsoft disparately tries to get Yahoo, just to stay far behind Google in advertising, but maybe less far behind than they are now (see McDonald's trying to make Starbucks style coffee in the article).
I don't think Google cares much whether or not Google Docs ever replaces most MS Office installations. But it forces Microsoft to respond and protect their core business, and not focus on competing with Google in the markets Google actually cares about.
Meanwhile, Microsoft disparately tries to get Yahoo, just to stay far behind Google in advertising, but maybe less far behind than they are now (see McDonald's trying to make Starbucks style coffee in the article).