Beyond Binary

LAS VEGAS--As he takes the stage Wednesday, Steve Ballmer has a mighty big task ahead of him.

Not only is he taking over Consumer Electronics Show keynote duties from Bill Gates, he is also aiming to convince the tech world that Microsoft is serious about defending its turf on the PC as well as making headway on the Web, television and phone. Oh yeah, and then there's that whole economy-melting-down thing.

Ballmer hasn't arrived in Sin City empty handed, however. In perhaps the biggest announcement of the night, he will announce Microsoft is ready with a beta version of Windows 7 and he will show off some of its key consumer features.

Microsoft will also announce new deals for Windows Live that will see Microsoft's search engine become the default on PCs from Dell as well as touting a deal with Verizon Wireless that leaked earlier in the day. The company is also counting on two Halo game releases this year to help keep the Xbox 360 going in the right direction.

But Microsoft faces considerable competition in each of the areas Ballmer is discussing. On the PC front, a resurgent Apple has increased its share. In search, Google continues to dominate. In the phone market, Apple's iPhone has grabbed much of the spotlight, not to mention significant market share. Google also has joined the fray, while longtime competitors such as Research in Motion and Palm are trying to maintain their slices of the pie as well.

And then, of course, there's the substantial financial headwind. Ballmer is expected to express his usual optimism--despite the global financial outlook--and discuss the company's commitment to research and development in both good times and bad. That said, Microsoft is clearly not immune from the problems that led Intel Wednesday to announce that fourth-quarter revenues were down 23 percent from the same quarter a year ago.

On the PC side, Microsoft is looking to turn the page from Vista to its successor, Windows 7. Microsoft isn't talking about any new features of Windows 7, saying it talked about all of the key features at the Professional Developer Conference last year. Instead, it will attempt to demonstrate what features like improved home networking really mean for the average household.

As for the beta of Windows 7, Microsoft said it will be immediately available for technical beta testers and those in Microsoft's TechNet and MSDN developer programs and will be made publicly available on Friday. The company still isn't officially committing to a final release in time for this year's holiday season, although the company is clearly still aiming for that.

Ballmer will also discuss Windows Live. In addition to the global PC deal with Dell and the five year U.S. deal with Verizon Wireless, Microsoft has expanded its relationship with Facebook to allow users to see within their Windows Live homepage certain of their buddies' Facebook updates. The company is also stripping the beta tag off many of its Web-based and downloadable Windows Live products.

On the phone side, Ballmer is expected to talk about the improved mobile browser Microsoft released at the end of last year, but the company is not talking yet about when to expect a serious upgrade to the Windows Mobile operating system, which has grown rather long in the tooth. Microsoft has made reference to an interim Windows 6.5 release that could serve as a bridge until the more significant overhaul of the operating system--Windows Mobile 7--makes its delayed debut.

On the automotive side, Microsoft is announcing a new version of its Ford Sync entertainment system that uses voice recognition software from its Tellme acquisition.

While that's the main news of the show, check out our live blog to get some live quotes, our commentary, as well as updates on any celebrity guests or funny videos that are often the hallmark of Microsoft's keynotes.

See also: Windows 7 beta: First impressions