We should be very careful about criticizing others for their failed products. The side-effect of experimentation and innovation is that some of the experiments will result in failure to find market fit. Market fit failure isn't a good thing for a company, but it's much worse to not experiment at all.
Zune could have been a good brand but rather than sticking to their guns, they abandoned it. Live was another unifying brand that they gave up on too quickly in favor of new rebrandings -- Bing, Office365, etc.
My point is that the constant jumping from idea to idea and rebranding instead of sticking with good ideas and revising until they're successful is a pattern of the Ballmer years that is a big part of Microsoft's lack of impact in the computing world over the past 5-10 years as Apple and Google and Amazon have risen to the forefront.
For that matter, the Zune was a (late) iPod clone; sure, it had some experimental features (that didn't pan out, but, hey, they tried), but it was hardly seriously innovative.
It also was yet another example in how you'd best not trust Microsoft, as part of it they threw their PlaysForSure ecosystem under the bus.
Hmmm, getting whole sectors of the world to trust Microsoft in the future is going to be a tall order for the next CEO, assuming he doesn't just punt on many of them, which might be the wisest thing to do.
A small startup that gets squished by larger competition has an excuse as to why it shut down services and let down it's customers. Microsoft has no such excuse. They failed to compete, then the failed their customers. Innovation is wasted if it's improperly handled.