Image: CES, Consumer Electronics Show, Steve Ballmer, Microsoft
Paul Sakuma  /  AP
Microsoft Corp. CEO Steve Ballmer talks about Windows 7 as he delivers the keynote address at the International Consumer Electronics Show, Wednesday, Jan. 7, 2009, in Las Vegas.
updated 1/7/2009 11:22:47 PM ET 2009-01-08T04:22:47

Microsoft Corp.'s next version of the Windows operating system is almost ready for prime time.

That's one message Chief Executive Steve Ballmer delivered on the eve of the official opening of the International Consumer Electronics Show.

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The world's largest software maker also disclosed deals to make its Live Search programs the default search engines on more personal computers and mobile phones. And it announced a new version of its Ford Sync in-car technology that folds in the voice-operated directory service TellMe, which Microsoft bought in 2007.

For years, the opening keynote at CES belonged to Microsoft Chairman Bill Gates, whose status as industry pioneer justified the sweeping visions of the future he'd build into his speech. Gates passed the mantle on when he stepped down from day-to-day operations at Microsoft last summer, and Wednesday marked Ballmer's first time making the high-profile address.

"It feels like we've entered a period of reduced expectations, a time when we may be tempted to temper our optimism and scale back our ambitions," Ballmer said, in a nod to the recession. "But no matter what happens with the economy or how long this recession lasts, I believe our digital lives will only continue to get richer."

Ballmer said Microsoft would continue to invest more in research and development than its technology peers.

The CEO announced that a nearly final "beta" test version of Windows 7 will be available Friday for regular PC users to download and tinker with.

The new operating system — which could be available for purchase on PCs within a year — uses much of the same underlying technology as its predecessor, the much-maligned Vista. But Windows 7 aims to resolve many problems PC users had with Vista. For instance, Microsoft pledges to make it easier to install peripheral devices and to have the software pump out fewer annoying warnings and notifications.

Ballmer also pledged that Windows 7 will boot faster and drain laptop batteries more slowly.

"I believe Windows will remain at the center of people's technological solar system," Ballmer said. "We're putting in all the right ingredients: simplicity, reliability and speed, and we're working hard to get it right and to get it ready."

Ballmer is hoping to boost the number of people using Microsoft's Live Search engine, which ranks well behind Google Inc. and Yahoo Inc. in popularity, through a deal with PC maker Dell Inc. Dell will put a special Live Search browser toolbar and Windows Live programs, including Microsoft's e-mail and instant-messaging applications, on most of the consumer and small-business PCs that it sells worldwide. That deal replaces a relationship between Dell and Google.

The CEO also announced Microsoft has formed a five-year partnership with Verizon Wireless that calls for the Live Search tools to be added to all Verizon cell phones in the U.S. that can access the Internet.

Among the other highlights from Redmond, Wash.-based Microsoft: The company added Flash support — required for watching YouTube videos — to its cell phone version of Internet Explorer. And it created a link between Facebook and its own Windows Live social network, so when people update their status message or upload photos on Facebook, that information appears on the Microsoft site, too.

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