For a company that's pretty acquisitive, making one acquisition this year is indicative of how difficult the M&A environment is. Microsoft has only made one acquisition this year, after 15 in 2008 and a typical M&A run of 20 annually, according to Don Dodge, of the emerging technology team at Microsoft. (Check out Don's Vator profile to see Ashton Kutcher with Don!)

Dodge was speaking on a panel, discussing whether corporate buyers were providing exits for the many VC-backed deals in need of an exit. Dodge said Microsoft is very much investing. Microsoft typically buys  companies that are using the Microsoft platform and filling holes in Microsoft's platform. Recently, Microsoft just bought Vancouver-based gaming company BigPark.

But we're practically six months into the year and Microsoft's only done one deal. What's taking so long? Dodge said entrepreneurs aren't accepting reality. They're not budging from last year's prices. The good ones are holding out for better valuations, and the bad ones aren't worth buying.

Here's my interview with Don at the AlwaysOn Venture Summit East conference, held in Boston this week.