That astounding admission of weakness from the blustering and cocky Ballmer was only the beginning. Over the weekend, the wheels seemed to fall completely off the once-mighty Microsoft juggernaut.
For one thing, Microsoft took the bizarre step of mimicking the old "Pepsi Challenge" of the 1980s. The company, in disguise, brought together a group of on-record Vista haters, and asked them to try a new operating system called "Mojave." According to Microsoft, 90 percent of the Mojave testers professed to having a positive experience with the software. That's when the Microsoft people, metaphorically, pulled the fake cover off the box and announced, "Ta da! It's not really Mojave, but Windows Vista/Folger's Crystals/Pizza Hut!"
As blogger Christopher Null noted, "Presumably none of the focus group members had to face peripheral incompatibility problems and missing drivers, or watch their old XP computers suddenly slow to a crawl due to Vista's overbearing resource requirements. Sitting down in front of a powerful machine, configured correctly, and taking an expert-guided tour of Vista isn't an unpleasurable experience. Vista in the real world is a little different."
What Null didn't mention was the sheer creepiness -- and flop-sweat desperation -- of this gambit by Microsoft. Just how scared is the company by this apparent backlash against -- or at least glacial adoption of -- Vista.
This much: on Monday, Microsoft's official Vista team took advantage of its own blog to publicly excoriate the author of the Forrester report, Thomas Mendel, who surveyed 50,000 users to prepare his report, and accuse him of being "sensationalist" and "schizophrenic." The tech world looked on in stunned disbelief.
Beyond the sheer foolishness of attacking the messenger, the very idea of making a bitter enemy of a person who not only plays an important role in helping your biggest customers make their purchasing decisions, but also, ultimately, influences your stock price, seems an act of amazing stupidity and short-sightedness.
You can't imagine another great tech company like HP or Intel -- or even a brash youngster like Google or eBay -- doing something like this. This behavior, combined with the Yahoo play, the Ballmer memo and the Mojave bait-and-switch, smacks of a company that is not just frightened, but in actual fear for its very existence.
And perhaps it is.
In the tech industry, it's always been known that all of the various media and Web plays by Microsoft, whatever the attention they receive, are mostly (pardon the pun) Windows dressing -- and that Microsoft has always made its real money on just two product lines that date back to the company's beginnings: Windows and Office. With the latter, it always had the best product; with the former, it enjoyed the largest user base and the industry standard.
Through the years, Microsoft grew accustomed (and complacent) to each new generation of Windows being quickly, and gratefully, adopted by that base. That model worked for 20 years, and upon its strong foundation Microsoft constructed the most powerful software company ever known.
But the world changed, thanks to open-source operating systems like Linux, to a resurgent and reborn Apple, and to the unique capabilities of the Web. Meanwhile, Microsoft did nothing to help its case: each generation of Windows, built upon the ones before, were buggy and increasingly unreliable.