On the other hand, Microsoft has for a long time made a serious investment in basic research, both on the programming language side and on algorithms, but that hasn't stopped them from misfiring in multiple product categories.
If you look at the battles that were won by archery (Crecy, Agincourt, Mongol domination of Chinese, Moslem & European armies) it was the volume of arrows that won them, not the weight of the arrows.
There were some battles where arrow weight was mildly important (eg, at Agincourt where the French armour had advanced enough since Crecy that it gave some reasonable protection against arrows). But even in these battles the archers used heavier heads on the arrows (which were also shaped differently) - not more wood.
Anyway - totally off topic, and like I said I think Google's strategy is good. But their analogy breaks down when we actually look at history.
http://research.microsoft.com/apps/catalog/default.aspx?t=pu...
However, this work rarely seems to make it into their consumer products. I suspect it's mostly an issue of the organisational structure of Microsoft, rather than the type of research, which makes it difficult to jump the gap from research to products.