Not sure why it's "sad" that Hotmail is a top three provider? It works well and has a simple layout that is easy to use for most people, even those who are less technically minded. I'd say that was quite an achievement.

Microsoft's online services division (including Hotmail) has cost them millions, if not billions over the years. MS may have gained and held a foothold in assorted online spaces but they've never made money in the space as a whole and it's highly questionable whether they've gained any strategic benefit from it.

From a business perspective it's very questionable whether MS really achieved anything with either purchase.

Essentially the OP uses the acquisitions to suggest that you can just buy what you don't invent, but history says that that approach really didn't work out well at all for them in either the short or long term.

Sad, because....?