Open sourcing anything software-related is a bad idea for Microsoft, unlike Google. Google are in the search/advertising business, not the software business. Their "crown jewels" are the databases they've collected about everything. Microsoft are in the sofware business. Their "crown jewels" are the source code for their products.
You'll note that Google aren't opening up their crown jewels: you can't just download their raw web page index and do your own thing with it. Since they're not in the software business, they can afford to give away or open their software tools. Since Microsoft are in the software business, that hurts them.
Now there's an interesting symmetry here. Being (primarily) in the software business should mean that actual content and databases isn't too important for Microsoft. If they wanted to hurt Google, they would open up their raw msnsearch indexes and other useful content databases. That would hurt Google, because people could download massive competing data collections and create their own competing search engines without the huge resource investment in crawler farms etc.