Microsoft still has about 90% desktop market share. In the Office document market, they're even stronger. Microsoft simply came a little late to improving their mobile product, which left the door open for Google, thus missing out in an important new market. Their revenues have constantly increased over the last decade. They have close to $100 billion in cash reserves.
http://markets.ft.com/research/Markets/Tearsheets/Financials...
Microsoft is still an incredibly powerful company.