Microsoft Corp.’s unwanted bid to take over Yahoo Inc. is the starkest evidence yet that the once-mighty Microsoft has gotten pudgy and lazy.

There was a time when Microsoft was cocky and innovative. It did what it wanted to do and crushed whoever it needed to. But somewhere along the way, it seemed to lose its drive, its hunger to excel. In recent years, many of its endeavors think MSN and Vista fell solidly in the so-so category. Microsoft seemed satisfied with this collection of also-ran initiatives and its dominance in, well, Windows and not much else. And why not? It was minting money. Inevitably, it became pudgy and self absorbed.

While Bill Gates slumbered, dreaming about what to do with his billions, Google sprang up and ran off with the Internet search businesses.

Now, Microsoft’s bid to bring Yahoo into its fold has the feel of two weaklings trying to gang up on the new bully. Who knows? Maybe Microsoft’s Hail-Mary pass to Yahoo will work. For the sake of Yahoo’s 2,000 or so workers in Santa Monica and Burbank, let’s hope it works out well. But the point is: The Microsoft of a dozen or so years ago would not have let itself sink to this predicament.

—

Microsoft’s slippage is a good reminder that dominant companies don’t stay that way forever. General Motors, AT & T; and IBM were, in their day, all thought to be too powerful. Some were subject to anti-trust action. But all those companies, like Microsoft, got fat and happy and eventually were shown up by upstarts that were nimbler and smarter. The same is true with most every dominant company before them.

Gates, when queried about Microsoft’s power, used to say that companies, especially technology companies, don’t stay powerful for long. Somewhere, he said, a couple of guys in a garage were tinkering on an innovation that could put Microsoft out of business.

Turns out, a couple guys who tinkered not in a garage but in the Stanford University dorms the Google guys are starting to get close to fulfilling Gates’ prophecy.

—

If you read the Business Journal, you know each week we compile at least one ranking that we call The List. We noticed last year that Panda Restaurant Group kept showing up on those lists.

It was No. 5 on the minority-owned business list; No. 22 on the list of largest private companies; No. 6 on the list of corporate philanthropists; the No. 8 large company on the list of best places to work; and No. 80 on the list of fastest-growing private companies.

It’s difficult for a company to get on the last list for more than two or three consecutive years because it’s tough to sustain fast growth. Panda has been on that list seven consecutive years.

When you look at those rankings, you see that Panda is not only a consistently high performer as a company but it is a good corporate citizen and a good place for employees. When you consider that Andrew and Peggy Cherng are immigrants whose business started with borrowed money and quickly grew to be the biggest such restaurant in its class, you see why they are the Business Journal’s Business Persons of the Year. That story begins on page 25.

Charles Crumpley is editor of the Business Journal. He can be reached at [email protected].