Microsoft innovated as well, but Microsoft also engaged in significant anti-competitive behavior. Memories of the details have proved to be pretty short.
However, if we were really honest we'd acknowledge that aquihires, and the process of killing products when they could have been spun off and sold for a nonzero sum involve rent-seeking considerations as part of the equation. It's a good strategy to stop developing something that erodes the net value of all of your products, but how you do that gets complicated when you try to define what is and is not anti-competitive behavior.
My main point about Microsoft vs. Google innovations is that Microsoft had reproducible products (obviously not reproducible business) but Google has irreproducible products: not in theory but in practice.
However, if we were really honest we'd acknowledge that aquihires, and the process of killing products when they could have been spun off and sold for a nonzero sum involve rent-seeking considerations as part of the equation. It's a good strategy to stop developing something that erodes the net value of all of your products, but how you do that gets complicated when you try to define what is and is not anti-competitive behavior.