I'm guessing that Bill Gates left quite a "to do" list for Microsoft CEO Steve Ballmer before he stepped down last month.

It probably went something like this: 1. Take over Yahoo. 2. Destroy Google. 3. Defeat Apple.

I admit that I'm guessing about the last two points, but the evidence seems to be stacking up in that direction, especially considering some of the latest news.

Item one on the list is obvious going Microsoft's way. What started out as an unsolicited offer to buy Yahoo is turning into a hostile takeover with the main event scheduled for August 1.

Whether Yahoo will be able to remain independent, or whether it will be broken up between Microsoft and investor Carl Icahn is yet to be seen.

But as the epic battle continues, Microsoft has apparently found a second Internet company that might help it continue its battle against Google for advertising dollars: America Online.

While that may seem like a good idea on paper, people familiar with AOL's brand reputation were probably left scratching their heads when they heard the news.

Fifteen years ago, AOL was the company that brought many people into the Internet Age. The company shipped the software to every human it could find, but the introduction of DSL service changed things. People found they could access the internet without the hassles that AOL created.

This is the company Microsoft is considering for Plan B? Well, despite declining figures, AOL is still a viable company, at least for now.

The company still owns MapQuest, social networking site Bebo, and the AOL instant messenger.

More importantly, it is still estimated to control 11 per cent of the internet's advertising revenue. It doesn't seem like a great deal for Microsoft, but it's better than nothing if the Yahoo deal fails.

While the AOL deal may seem a little odd, Microsoft's foray into movie downloading is just smart. The company is working with Netflix in the US to stream movies via the Xbox consoles. That could even have implications here.

One local Microsoft manager has said that there is a push to bring Xbox Live into the region during the next fiscal year. If Xbox Live is launched in the Middle East, could the ability to stream movies be that far behind?

The answer may be a resounding no, since distributions rights would still have to be worked out, but it's a possibility.

In the US, the ability to stream to movies to an Xbox is just another way for Microsoft to chip away at Apple's iTunes. Netflix certainly won't mind adding Microsoft as a partner.

The company already partners with LG. Will that accomplish Ballmer's "to do" list? In a word: no.

Neither Apple nor Google are in a weak position financially like Yahoo was, and Microsoft's deals with AOL or Netflix are not going to make either company shake in its boots.