It was interesting to see the press coverage Microsoft got last week for its Office 2010 launch. Almost universally, reports from both technical and mainstream press around the world focused solely on Microsoft's cloud solution, the Office Web Apps. But these weren't just stories about the web. They were full of drama and intrigue. Here, they intoned, was Microsoft, finally poised to attack its main rival, Google, in the cloud.

Well, I've got bad news for those of you hoping for a fight. That battle, alas, is already over. And it is Microsoft, not Google, that walked away victorious.

What's that, you say? You've been led to believe that Google is some kind of cloud computing powerhouse and that the mathematical geniuses from Silicon Valley have already sewn up this next generation market before that poor, slow moving technology dinosaur from Redmond could even figure out that the world had changed.

You've been sold a bill of goods, folks.

But don't feel bad. We've all been misled, myself included. We've all succumbed to the all-too-easy-to-believe alternate reality where Google actually delivers solutions that real customers want, where companies actually pay Google for these services, and where Google actually makes money on anything other than online advertising.

It's time to wake up. Google sells ads. Stupid, annoying, little ads. That’s quite literally the only service the company offers that generates any appreciable amount of revenues. Google is a one-hit wonder. And it's one hit is pretty shabby, when you think about it.

Sure, Google has hundreds of always-in-beta services on the web, from what I can tell. (And some that have simply had their beta tags removed because, well, certain customers don't like to think they're using beta products.) But these services are the technology equivalent of throwing spaghetti on the wall and seeing what sticks. Sure, some are popular. But they're only popular when they're free. None of them makes any money. Not really.

What tipped me off to the fact that we are all living in a Matrix-style alternate reality—one that Google is all too willing to let pass uncommented on—were two disconnected announcements that were made over the past couple of months. In late March, Google announced that it now has over 25 million users of its Google Apps service, which first became available four years earlier. That sounds pretty impressive until you realize that the majority of those customers don't pay Google a cent. Most Google Apps "customers" simply utilize the free version of the service.

Microsoft also made a similar announcement, this one dating back to late April. At that time, Microsoft revealed that it had garnered over 40 million customers to its own Business Productivity Online Suite (BPOS). The cloud-based BPOS, which competes directly with Google Apps, offers hosted versions of Exchange, SharePoint, Office Communications, and Live Meeting. But unlike Google Apps, there is no free version of BPOS. Every one of those 40 million customers pays a monthly fee for the service. And BPOS has been on the market for less than two years, which is less than half the time of Google Apps.

What's perhaps most amazing about this reality check is that Google's Exchange alternative, the Google Apps versions of Gmail and Google Calendar, are inarguably the company's only functionally competitive products for businesses. As I've discussed previously, its Office alternative, Google Docs, is laughably bad, and this month's introduction of Microsoft's Office Web Apps renders it superfluous. But if Google's only credible challengers can't even compete, why is it that the company has been so routinely considered not just viable competition but, in fact, the supposed market leader?

Google has some interesting services, yes, but truth be told Microsoft is kicking Google where it hurts—in the cloud computing markets that matter. And while Google's advertising dominance provides the company with the financial resources to artificially prop up its underperforming other products (i.e., all of them) that's not exactly the kind of business model that companies or individuals should embrace when they're looking for solutions on which to bet their future.

My point here is simple. I'm not saying that Microsoft has all the answers. If anything, I wish the company were more aggressive. But if you look at this market objectively, it's pretty clear that Google has none of the answers. Unless, of course, you're looking for creepy technology that can match sponsored links to the content of your email.

Yeah, Google has that one all locked up.