Marketwatch's John Dvorak has an interesting theory about Microsoft Corp. (NASDAQ: MSFT): It's turning into a holding company similar to the famous one controlled by Bill Gates' friend and bridge partner, Warren Buffett. He outlines this theory in two columns, which you can read here and here. Here's an excerpt outlining the central thesis:

Imagine Microsoft not as a big software company but as KKR or any of the private equity holding companies. Or Berkshire Hathaway.

If seen as such, I can think of numerous stand alone companies within the company already: an office productivity software company, a server software company, an operating systems software company, an email specialty company, an online service (MSN) company, a book publishing company, a mouse and keyboard manufacturing company, a game console company, a game software company, an online gaming company. You get the idea.

Dvorak may very well be right, but this isn't a change I think investors want to celebrate. While Berkshire Hathaway (NYSE: BRK.A) has had tremendous success, the reality is that the vast majority of conglomerates don't perform well. Acquisitions tend not to create long-term value, and if that's the way Microsoft is going to have to fuel growth ... investors should move along.

Cheering for Microsoft's rebirth as a holding company is like celebrating the fact that your 9-year old skips school to play basketball. Maybe he's the next Lebron James, but it's not likely.

Microsoft has a steep hill to climb back to relevance, and trying to go the conglomerate-route will probably only make it steeper.

My friend and colleague Georges Yared has been unabashedly bullish on shares of Apple Inc. (NASDAQ: AAPL), and his buy call has looked nothing short of brilliant for a long time:

With all the talk about how the once-great Microsoft is losing talent, shedding massive amounts of consumer weight and facing increasing competition from companies like Google, is Microsoft doomed?

John Dvorak, noted PC World and MarketWatch columnist, thinks so. So do others. Is there reason for alarm? Remember this -- MSFT shares recently hit a five-year low on the heels of the Redmond giant's latest lackluster quarterly results and rumors continue to fly that the next Windows operating system, Windows Vista, will be delayed until the year 2010.

Robert Cringely from PBS writes rather eloquently that Microsoft's business model can't be re-engineered fast enough to meet these challenges and he hints at the software giant taking another corporate direction before it's too late, even though he thinks MSFT will survive no matter what.

Like Cringely, I don't think Microsoft is doomed. Why? Several reasons. First, it has the cash hoard to make acquisitions to catch up with almost any competitor it chooses -- and yes, Google will prove to be the biggest challenge.