Windows Live/Office Live is interesting. On the one hand it represents the possibility of a paradigm shift in the right direction that Microsoft desperately needs in order to modernize the business model, but on the other hand, it very much seems like an isolated silo that may ultimately end up as lost potential. It’s clearly an afterthought release, but still, there should be tons of retro integration happening… The integration value story for Live/Vista, Live/O2k7, etc. should be huge and heavily marketed… Instead it doesnt seem to exist, or isn’t happening very quickly.
If the reason for this is that MSFT would wind up "back in court", then maybe the company would have been better off broken up (oddly enough). Maybe the answer is that Live! should have a set of clear integration points built in and it should be opened wide to ISVs. That would go a long way towards creating an eco-system that has a chance of providing real end-user value without appearing to be the product of monopolist advantage.
It will be interesting to see how this new initiative develops (or doesnt develop).