Microsoft faces other netbook-related woes as well. The company doesn't get paid as much for a version of Windows sold on a netbook as it does for a version of Windows sold on a laptop or desktop PC. There's very little margin on a machine selling for $200 to $400, and so Microsoft simply can't charge full freight for Windows on one. And given the price that Microsoft charges for consumer versions of Office -- usually about $200 for the lowest-priced version -- netbook owners who use Windows aren't likely to pay for Office either. It doesn't make much sense to pay as much for a piece of software as you did for your entire PC.
Microsoft clearly recognizes the problem and is taking action to try to solve it. First, it built Windows 7 to run on netbooks, something that Vista doesn't do. When Windows 7 ships, expect Microsoft to spend plenty of money promoting it for use on netbooks, in an attempt to drastically cut into Linux sales.
In addition, Microsoft is working on low-cost, ad-supported, Web-based versions of Office. That way, it can start to get Office revenue from netbook owners.
Will these steps be enough to make up for the overall shortfall in revenue caused by netbooks? Probably not. That's why the company is desperate to figure out a way to make its online businesses succeed. If it can't, the days of big revenue growth are behind Microsoft, thanks in part to netbooks.
Preston Gralla is a Computerworld.com contributing editor and the author of more than 35 books, including "How the Internet Works" (Que, 2006). Computerworld is an InfoWorld affiliate.