Live blog: Ballmer at CES

LAS VEGAS--With Bill Gates now a Microsoft part-timer, company CEO Steve Ballmer is filling in at this year's opening keynote for the Consumer Electronics Show. We're bringing you live coverage of his speech, which started at about 6:30 p.m. PST. Windows 7 is likely to be the centerpiece of Ballmer's discussion. Another piece of his keynote--a deal with Verizon Wireless--leaked out earlier in the day Wednesday. It's a five-year pact that will see Microsoft's search show up on all of the carriers' phones.

Steve Ballmer at CES

(Credit: Corinne Schulze/CNET Networks)

6:28 p.m.: Waiting for Ballmer, some very loud rappers just finished their set.

6:30 p.m.: And here he is...Well, Gary Shapiro, the head of the consumer electronics association

6:32 p.m.: Shapiro is still talking, but the embargo has lifted, so you can check out all of the news here.

6:33 p.m.: Also, I have a story here from an interview I did with Windows executive Bill Veghte. The key takeaway: Microsoft is still hoping to get Windows 7 out in time for the holidays, but it has told PC makers it could still be this year or early next year. Microsoft has said it will be out by the third anniversary of Vista's January 2007 launch.

6:34 p.m.: Ballmer's not out. There's video, but so far it's not the usual funny video. It's shots of Windows and Windows Live.

6:36 p.m.: Now Ballmer's out. Red sweater and blue shirt, slacks, not that his wardrobe is a big deal.

6:37 p.m.: "So this is CES," Ballmer said as he took the stage, noting that he is taking the reins from Gates. "Bill is now devoting most of his time to helping people around the world."

6:38 p.m.: Ballmer said he got a series of messages from an "eclectic group" of people today. Showing fake IMs from Illinois Gov. Rod Blagojevich, Treasure Secretary Henry Paulson, Yahoo CEO Jerry Yang, and others.

6:39 p.m.: Yang wanted to know why Ballmer keeps ignoring his friend request on Facebook, Ballmer said. Paulson, meanwhile, asked for a copy of Microsoft Money, according to the IM shown on-stage.

6:41 p.m.: Ballmer's now talking about Microsoft's focus on entertainment convergence, the so-called three screens: PC, TV, and phone. "Now it's no longer just about the desktop but really about a broader vision," he said.

6:44 p.m.: The TV is the oldest of the three screens, but in many ways the least evolved, he said, though that is rapidly changing. The boundary between the TV and the PC will disappear, he said.

The second area of change, he said, centers on how we interact with all of these devices. The computer will be able to hear you and see you. Speech gestures and handwriting will become a normal way of how we interact. We will still use a keyboard and a mouse when it makes sense.

6:46 p.m.: Ballmer said that Windows is poised to play a role not just on the phone, but also on the Web and on phones. "Windows has become the language that over a billion people speak around the world."

6:48 p.m.: They are showing a video with the latest Windows PCs and Windows Mobile phones.

6:50 p.m.: Subtle dig at Apple: "At this time economically when people are struggling to make every dollar count" the choice that offers the most power and most value for the money is a PC, Ballmer said.

6:52 p.m.: Now shifting to Windows 7. "We are on track to deliver the best version of Windows ever. We are putting in all the right ingredients...and working hard to get it right and to get it ready."

Windows 7 should boot more quickly, have better battery life, and not pop up as many alerts, he said.

"We are releasing the beta of Windows 7," he said, to a smattering of applause.

Windows 7 beta will be released

(Credit: Corinne Schulze/CNET Networks)

6:53 p.m.: "I encourage you all to get out and download it," he said. Now he's talking about Windows Live.

6:54 p.m.: Three big announcements on Windows Live: Windows Live Messenger, Windows Live Photo Gallery, and Windows Live Mail. It's final, it's free and it works on Windows XP, Windows Vista, and Windows 7 beta.

6:55 p.m.: Also the Facebook deal, which will allow people to have their Windows Live network notified when they post updates or photos to Facebook.

Microsoft and Verizon announced a mobile search deal Tuesday.

(Credit: Corinne Schulze/CNET Networks)

6:56 p.m.: Third are distribution deals with both Dell and Verizon Wireless. (The Verizon deal leaked out earlier Wednesday, but he didn't pull a Steve Jobs and strip out mention of them from his speech)

6:57 p.m.: Now getting a demo of Windows 7 as well as the new Windows Live and some Windows Mobile stuff.

6:59 p.m.: This is the eye candy portion of the talk, with Microsoft showing off the improved taskbar for managing multiple windows as well as a button that clears the screen of all open windows. It's the same stuff shown at the PDC in October.

7:00 p.m.: Those expecting some secret new features of Windows 7 to show up in the beta will be disappointed. It's basically the stuff that was in the pre-beta along with the user interface stuff that was shown at the PDC.

7:01 p.m.: Now they are showing off the "Homegroup" feature designed to make home networking easier to set up and also more intuitive. (The catch: all the PCs involved have to be Windows 7 machines in order for Homegroup to work.)

7:02 p.m.: Another Windows 7 feature, called "Play To" lets users send music and other media to an Xbox, a Roku box, or other devices on a home network.

7:03 p.m.: Now they are showing multitouch using a touchscreen to navigate through a 3D map of Manhattan. "We built touch into the DNA of Windows 7," said Charlotte Jones, a group product manager who is doing the Windows demos.

Touchscreen mapping demo

(Credit: Corinne Schulze/CNET Networks)

7:04 p.m.: For those who were at PDC--or read about it--there's not a lot new here. The only new thing so far is that it has reached beta.

7:05 p.m.: Windows Mobile demo also not new. It's the version of Internet Explorer 6 for phones. The big deal is that, unlike the iPhone's Safari browser, it can play Flash content. The code was finalized late last year. But it will start showing up in phones this year.

7:09 p.m.: Jones is now showing how Microsoft is trying to make the Windows Live home page a sort of network of social networks, showing the updates that people make both within Windows Live as well as in other places like Twitter, Flickr, and now Facebook.

7:14 p.m.: There's a band now on stage. Apparently called Tripod. According to Wikipedia, they are an Australian musical comedy act.

7:15 p.m.: They are singing about being ready to be with their girlfriend just as soon as they finish their game. "Can you move a little to the left? I can't see the TV."

Sadly, it's probably the best part of the keynote so far--and getting the most audience reaction.

Robbie Bach, president of Microsoft's Entertainment and Devices unit.

(Credit: Corinne Schulze/CNET Networks)

7:16 p.m.: Now taking the stage, Microsoft Entertainment and Devices unit President Robbie Bach.

He mentions that Ford is introducing a new version of its Sync in-car entertainment.

7:19 p.m.: Zune has also had a great year, Bach said. There are 2 million people on Zune social. He's also touting the innovations on subscriptions, but no numbers as usual (late last year, Microsoft conceded subscriptions were lagging expectations).

7:20 p.m.: He also didn't give an update on Zune unit sales. Now he's talking about IPTV.

Bach talks about a new feature that SingTel (a Singapore telecom firm) is adopting that essentially lets you go back in time to select a program that previously aired but wasn't recorded.

7:21 p.m.: It will be up to carriers to decide how far back customers will be able to go back to get a show on-demand.

7:22 p.m.: Now he's talking Xbox, noting that the company is in the key selling period in terms of unit sales, as its price has reached below $200. He promised "accelerating momentum."

He gets some applause as he talks about the two new Halo products coming--Halo Wars and Halo 3 ODST.

7:23 p.m.: Halo Wars is a strategy game and due out February 28, with a demo that will be available February 5. Halo 3 ODST is out this fall, action-style game with new characters and scenarios.

7:26 p.m.: Demoing Xbox Live Primetime, a place for live interaction. Demo is 1 vs. 100, an Xbox game show where people can win real prizes. Microsoft talked about it briefly at E3, but this is the first demo, I believe.

Demoing Xbox Live Primetime.

(Credit: Corinne Schulze/CNET Networks)

7:30 p.m.: First glitch of the night: Robbie's Xbox controller wasn't working as he tried to navigate his Netflix queue. Working now.

7:33 p.m.: Talks about the popularity of music games. 60 millon tracks downloaded for games like Rock Band and Guitar Hero via Xbox Live.

7:34 p.m.: Demoing Kodu, a tool from Microsoft Research that allows users to create games without having to know a traditional programming language.

Kodu

(Credit: Corinne Schulze/CNET Networks)

7:35 p.m.: Kodu was formerly known as Boku, though a Google search for that name turns up some extremely not-safe-for-kids images.

7:36 p.m.: Microsoft had said it planned to change the name. Bach has a kid on stage showing how she created a game using the tool.

7:39 p.m.: The 12-year-old beats Bach handily at the game she created. Ballmer comes back on stage. "If anyone thinks he threw that game on purpose, that would be wrong."

Robbie Bach and Sparrow

(Credit: Corinne Schulze/CNET Networks)

7:42 p.m.: Should be wrapping up soon. Microsoft Research is showing some stuff from the labs, including a digital anatomy textbook.

7:44 p.m.: Showing a simulation of caffeine and your brain. Man, i could use a little of that right now.

7:48 p.m.: She shows a flexible display less than 1mm thick in color. This is pretty cool.

Microsoft Research

(Credit: Corinne Schulze/CNET Networks)

And, she's done.

7:49 p.m.: "Despite the economy, I hope you will all agree with me that our industry has an incredible, incredible opportunity ahead of us," Ballmer said, in wrapping up.

End of keynote.

7:50 p.m.: Tripod comes back for one more song.

CNET News' Marguerite Reardon contributed to this report.