Ballmer, Gates show off Windows 7

Posted by Humphrey Cheung

Carlsbad (CA) – He may be stepping down from day to day duties at Microsoft, but Bill Gates can still hold a crowd.  Gates and Microsoft CEO Steve Ballmer took center stage at the Wall Street Journal’s D: All Things Digital Conference last night in Carlsbad California and fielded tough questions along with demoing an upcoming touch-sensitive version of Windows, but it was Ballmer who did most of the talking.  He emphasized that Vista is not a failure and that Microsoft was still pursuing some type of partnership with Yahoo.

In its sixth year, the ‘D” conference brings together the top names in the tech where they answer (or at least try to answer) questions from the WSJ’s Walt Mossberg and Kara Swisher.  The night started off easy for Gates and Ballmer as they talked about their early days of dropping out of Harvard for Gates and Stanford Business School for Ballmer.  But things got more interesting as Swisher and Mossberg turned up the heat.

In terms of the Yahoo merger, Ballmer said it is not completely dead just yet.  He told Mossberg that Microsoft is still in discussions with Yahoo for some type of partnership, but that Microsoft won’t be rebidding for the company.  However, he did throw in that Microsoft “reserves the right to do so”.  Gates added that Microsoft is looking to avoid a monopoly. “We like to compete,” he said.

Drawing on a whiteboard, Ballmer explained how Yahoo would have added to Microsoft’s search engine business.  He drew out Microsoft’s business advantages in advertising and software (he probably meant office suites) and talked about how Yahoo would have been an accelerant to the business.

Obviously, such a partnership would have given Google a run for its money in the search engine wars, but Gates says Microsoft is proceeding with its own plans for gaining market share.  He noted that the company is assembling a team to improve its search engine, but Mossberg hit back and asked why Microsoft’s search market share was dropping? Gates did not have an answer.

Ballmer and Gates changed gears by showing off some of the touch command functions of the upcoming Windows 7 operating system, which is due in late 2009.  For Apple iPhone users, (video on the D website here) the technology should bring feelings of a déjà vu as the multi-touch pinch zoom in and zoom out are exactly the same as on the iPhone. The OS even has a dock, much like Apple’s operating system.

The demo showed an early version of the OS running on both a laptop and a desktop-sized monitor.  Pictures were dragged about, selected and zoomed with the touch of one or many fingers.  Microsoft even showed off a touch-sensitive version of its Live Map by quickly spinning the globe and zooming into a city block with a few finger gestures.

But is Ballmer worried about Windows 7 being overshadowed by anything Apple will release in the coming years?  After all, it certainly seems like Windows will be incorporating more Apple-like features.  Ballmer dodged the question by heaping praise on Apple and Steve Jobs saying that their model works “fantastic” for their scale.  When pressed for an answer, he kept repeating that Microsoft’s system works well for 270 million customers while Apple works great for 10 million users.