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This article is from the In-Depth Report CES 2009: The Consumer Electronics Show

Microsoft's Ballmer to CES: Keep investing in tech despite economic woes

Editor’s note: I will be Twittering and blogging from CES this week. To follow my posts, visit my Twitter page, Scientific American’s Twitter page and ScientificAmerican.com’s 60-Second Science blog.

LAS VEGAS, NEV.—In his first ever CES keynote, Microsoft CEO Steve Ballmer yesterday acknowledged the tough economic times, but urged companies not to let investments or interest in technology flag.

"It seems like we’ve entered a time of reduced expectations,” Ballmer told a packed ballroom on the eve of this year’s Consumer Electronics Show. “But no matter what happens with the economy or how long this recession lasts, I believe our digital lives will get richer."

According to Ballmer, his company is putting its money where his mouth is. Microsoft, he said, spent $8 billion last year on research and development. The result? Among other new products a beta (or test) version of Windows 7, the successor to Windows Vista, that consumers will be able to test drive beginning Friday at http://www.microsoft.com/windows7. The rapid development of Windows 7 (about a year after the release of its predecessor) is perhaps the most concrete acknowledgement of Microsoft’s disappointment with Vista, which did not appear until several years after Microsoft introduced Windows XP.

Windows 7 is reportedly outperformed its predecessor, Vista SP1, as well as Windows XP SP3, in a test conducted by ZDNet’s Adrian Kingsley-Hughes, which is a good sign that the company is taking Windows in the right direction.

In addition to Windows 7, Ballmer announced a partnership with social networking Web site Facebook, that will enable consumers to share content they post on Facebook, including photos, by putting it directly into Windows Live, a Web service that Microsoft offers  on which customers can e-mail, post photos and perform a number of other functions typically found on social networking sites.

Microsoft also introduced two new versions--Halo Wars and Halo 3 ODST--of its successful Halo video game franchise for Xbox. The company has sold 25 million copies of its Halo game since its 2001 debut Robbie Bach, Microsoft’s Entertainment & Devices Division prez, said during the keynote. Xbox Live, an online gaming service  available to Xbox customers, this spring will offer an online version of the TV show "1 vs. 100" that  allows thousands of Xbox users to play together with real hosts and compete for real prizes. Xbox Live customers will also be able to access their Netflix accounts via  their TVs as well as their PCs (and someday soon, their cell phones).

Microsoft is hoping that its PC, TV and mobile phone presence will help the company attract at least some of the discretionary funds spent during these fiscally trying times.

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