Microsoft investors must feel like they are staring at that little hourglass tumbling over and over on their computer screen. Should they carry on waiting in the hope that something useful transpires, or just pull the plug?

It has been quite a year so far. There has been a failed takeover offer for Yahoo, a failed buy-out offer for a bit of Yahoo, a vague alliance with activist Carl Icahn to do something about Yahoo’s board – you get the idea. Now Kevin Johnson, the head of Microsoft’s online unit – where Yahoo would have resided – has quit and Steve Ballmer, chief executive, has announced another reorganisation of the business.

At a hastily restructured presentation to analysts, Mr Ballmer dismissed Yahoo as a “tactic, not a strategy” in Microsoft’s campaign to attract more volume to its search function. An expanded deal with networking site Facebook is a step in the right direction, but an acquisition may still be on the cards.

Meanwhile, Mr Johnson’s departure leaves the company somewhat in the lurch. He will initially be replaced by no fewer than three managers reporting to Mr Ballmer, while headhunters get busy finding a new online czar. The plan to separate the Windows Live part of the business from other online offerings will also have investors scratching their heads. So much for synergies.

There are some positive developments. Mr Ballmer recognised that fixing Windows Vista – one of the cash cows that allows Microsoft to push into new businesses – is a priority. He also explicitly acknowledged the resurgent threat from Apple. However, asserting that Microsoft can raise its game against its smaller rival will have investors thinking queasily of the Zune, Microsoft’s also-ran answer to the iPod. Similar scepticism will greet claims the company can “out-innovate” Google, even as increased research and development costs deepen concerns about margins. Time to hit the refresh button?

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