I agree that the "Live" brand is confusing and that Microsoft has not clearly explained what it is trying to accomplish. What I disagree with is the implicit idea that Microsoft KNOWS what it's trying to accomplish on the web (short of somehow miraculously vanquishing Google)--and that it has any reasonable chance of achieving it.
I argued a year ago that the web war was over and Microsoft lost. This seems even clearer with every passing day. The only question in my mind is whether Microsoft can build enough of a wall around its crown jewels--Office and Windows--to survive over the long haul.