Redmond is looking to extend its applications with Web-based services. But that's as much Web 2.0-ness as Microsoft needs.

Microsoft wants, in the worst way, to be cool. Apple and Sony and Google kind of cool.

To Microsoft's credit — at least so far — the company hasn't made the mistake of trying to get an instant infusion of coolness by jumping on the Web 2.0 bandwagon.

Only a few Softies seem to be all caught up in the Web 2.0 hype. The majority of them seem oblivious to the weak business ideas, buzzwords and bloviation that make me think "Bubble 2.0" every time someone mentions "Web 2.0."

Some Microsoft watchers may characterize Microsoft's failure to talk the Web 2.0/Internet economy lingo as proof that the Redmond software vendor has fallen behind the times.

Undeniably, Microsoft has had some infamous near misses when it comes to capitalizing on new industry trends. The company almost missed the Web/browser revolution. It came dangerously close to letting Google and Yahoo completely dominate search. And with its emphasis over the past couple of years on convincing developers and customers to forsake the Web client in favor of the "smart" (fat) client, Microsoft seemed like it was pedaling backwards instead of forward.

But just as there were some folks in the tech industry who wisely decided against trading their real, tangible jobs for spots at DrKoop.com, Kozmo.com and Pets.com, there are thousands of Microsoft employees who seem interested in building less-glamorous but more useful products like Visual Studio, Office and BizTalk Server.

On Tuesday this week, when Microsoft chairman Bill Gates and Chief Technology Ray Ozzie will hold a tech show-and-tell in San Francisco, we'll see just how well Microsoft will be able to resist the temptation to claim it's a charter member of the Web 2.0 club.

Word is Gates and Ozzie are going to highlight work that Microsoft is doing in services in Microsoft's newly minted platform products and services division. "Services" is a broad term. It can and does mean anything from hosted versions of existing Microsoft business software, to consumer-oriented offerings, such as Xbox Live and MSN Messenger.

Microsoft has a number of new services, many of them likely to be MSN-branded, in the new-product pipeline.

There is the still-unannounced (as of Monday, at least) hosted small-business bundle, expected to encompass everything from VOIP, to data-conferencing, that is being developed by Microsoft's stealth unified communications team. We've heard talk of a new Microsoft service, known internally as "Live Meeting Express," which may or may not be the same as this hosted small-business bundle.

There are a number of new search products under development at Microsoft that could debut as "services." There are new managed services on tap, such as the "Energizer" and "Exchange at Four Nines" offerings, that Microsoft and its channel partners are expected to start pushing out to customers in the coming months. There are plenty of new SharePoint-centric applets that Microsoft could morph into services. And then there's Groove, Ozzie's collaboration-software/service — which one of our sources recently described as "the poor man's SharePoint" — that Microsoft has said it will make part of its Office family.

If Microsoft officials tout any of its pending MSN services as examples of Web 2.0 deliverables, I'll take it as a sign that management has lost its way. There's no doubt that Microsoft needs to find a way to continue to grow in a world where its top two brands, Windows and Office, already have cornered in excess of 90 percent market share in their respective categories. And extending these applications with services is a sensible way to do this.

But Microsoft doesn't need to snap up a bunch of Web 2.0 startups, out-scour AJAX or invent the 38th signal to do this. The Redmond software maker just needs to stick to its knitting by developing new ventures that mesh with its established businesses. Microsoft needs to just keep saying no to Web 2.0, at least until Web 2.0 means something more than just "we want venture funding."

What's your take? Am I as much of a dinosaur as many accuse Microsoft of being? Or is there really no there there, especially for Microsoft, when it comes to Web 2.0? Talk back below or write me at mswatch@ziffdavis.com and let me know what you think.

This article was originally published on microsoft-watch.com.

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