Former MS Evangelist Robert Scoble had a recent post about how Google beat MS in search engines. He used the example of how even MS employees were, more likely than not, using Google over MS because it came back with more relevant results. I agree. When I need to look up something regarding a MS product, I no longer bother going to the MS and searching there. In the past, I would almost never find what I was looking for. But when i went to Google, the exact page I was trying to find would be within the first five hits, and usually was the top of the list.
Mr. Scoble advised MS to stop trying to attack Google from the front and, if MS insisted that it was in its best interest to be a player in search engines, that it flank Google by finding niches that Google were not yet good in. I agree and would go so far as saying that even if they do this, it is doubtful that MS could overtake Google in popularity (if that is the goal of MS).