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From the Los Angeles Times

TECHNOLOGY

After first 'digital decade,' Gates says farewell to CES

In his final keynote, the Microsoft chairman = speaks of=20 new ways to connect people and making machines smarter.

By Joseph=20 Menn
Los Angeles Times Staff Writer

January 7, 2008

LAS = VEGAS =97=20 Microsoft Corp. Chairman Bill Gates on Sunday used his final keynote = address at=20 the tech industry's top trade show to tout some of the same futuristic=20 technologies he ballyhooed at his first more than a decade = ago.

Gates,=20 who plans to stop working full time at Microsoft this summer to focus on = philanthropy, used his 11th International Consumer Electronics Show = keynote here=20 to predict that more Microsoft programs would come pre-installed in = cars, more=20 entertainment would be delivered via computer and personal computers = would get=20 easier to use.

Those ideas aren't as outlandish as when Gates = aired them=20 during his first CES speech in 1994. At least the first two are = demonstrably=20 true.

But Gates also made his typical CES entry into more exotic=20 territory, portraying a world in which commands spoken into a smart = phone can=20 find the closest showing of a movie and buy tickets to it. Look Ma, no=20 hands.

Gates said the world had completed its first "digital = decade," one=20 in which innovation had centered on the keyboard and the = mouse.

"The=20 second digital decade will be more focused on connecting people," he = said. He=20 predicted it also would feature progress in training machines to react = as people=20 do, with "natural user interfaces" that respond to speech and = touch.

Yet=20 even some of the far-out felt familiar. Gates said intelligent mobile = devices=20 would serve as guides to everyday tasks, which is pretty much what he = said in=20 2003. That's when Gates previewed "smart personal objects technology," = or SPOT,=20 which allowed watches to suck personalized news out of the air. It was a = commercial flop.

Robbie Bach, president of Microsoft's = entertainment and=20 devices division, said in an interview Friday that the track record of = the=20 substance of Gates' predictions was "quite good -- though you can = quibble with=20 the track record of the timing."

"Microsoft does not give up on = these=20 things," said Bach, who shared the stage with Gates on Sunday and is = expected to=20 take over the keynote slot in the years to come. "We're very=20 persistent."

When Gates gave his first talk at CES, computers = were in a=20 minority of homes and were essentially isolated there because Web = browsers=20 hadn't made the Internet an easy place to roam.

The intervening = years saw=20 Microsoft rise to become one of the most powerful companies on the = planet.=20 Although revenue and profit have continued to grow alongside computer = sales and=20 Microsoft is the third-largest U.S. company by stock market value, it = has in the=20 last few years lost the aura of invincibility.

Google Inc. and = other more=20 Internet-focused companies have stolen some of the spotlight and top = engineering=20 talent, while Gates' successor as chief executive, Steve Ballmer, has = labored to=20 establish Microsoft as a powerhouse in areas beyond PC operating systems = and=20 office productivity software.

Gates and Bach used CES to boast of = progress on that score, telling tens of thousands in attendance about a = slew of=20 deals with entertainment companies and others. Capping that was an = agreement to=20 provide NBC Universal with the technology to deliver dozens of = simultaneous live=20 Internet streams and 3,000 hours of free on-demand Web video from the = 2008=20 Summer Olympics in Beijing.

Microsoft will steer visitors at its = MSN Web=20 portal to the action at nbcolympics.com and collect an undisclosed = portion of=20 advertising revenue at the NBC site. The potential traffic is enormous, = with 30=20 times the amount of video that was available from the 2006 Winter = Olympics in=20 Turin, Italy, said NBC Sports Senior Vice President Perkins=20 Miller.

Microsoft also announced deals for movies from=20 Metro-Goldwyn-Mayer Studios Inc. and shows from Walt Disney Co.'s TV = networks,=20 including ABC and Disney Channel, to distribute on its MSN and Xbox 360 = video=20 services.

As for the prediction of widespread, voice-activated = software=20 in cars, it evidently will be fulfilled next year. That's when Ford = Motor Co.=20 said it would make Microsoft programs available standard or as an option = in all=20 Ford, Mercury and Lincoln vehicles.

Apple Inc. dominates sales of = digital=20 music. But digital video is still up for grabs, said analyst Roger Kay = of=20 Endpoint Technologies Associates.

In what might be called the = fight over=20 the last hundredth of a mile -- the connection between the study and the = living=20 room -- an Apple product that relays computer video to the television = screen has=20 done poorly. Microsoft's bestselling Xbox 360 gaming console can do that = now,=20 and Bach said Hewlett-Packard Co. and Samsung Group would sell TVs this = year=20 that enabled access to content on PCs through an included Windows=20 interface.

"That, to me, fundamentally changes the way things = work," Bach=20 said. In the mid-'90s, Gates & Co. underestimated such hurdles as = slow=20 broadband adoption.

Current hurdles include search technology = that lags=20 behind Google's and the inability to provide video entertainment that = moves=20 easily from device to device.

Gates soon won't have to worry as = much=20 about such matters. In July, the 52-year-old co-founder will become = Microsoft's=20 part-time chairman and spend most of his time at the Bill & Melinda = Gates=20 Foundation, the charity that is distributing tens of billions of dollars = of his=20 wealth.

Acknowledging that the keynote would be his last, Gates = said the=20 transition to new leaders inside Microsoft was going smoothly and that = he would=20 keep working on special projects, such as adapting software to address = world=20 health concerns.

"Gates is leaving at the moment when the = industry is=20 becoming a lot muddier and more competitive," Kay said. "Microsoft will = never=20 again be as dominant as it was during the 1990s."

But Microsoft's = unmatched war chest will provide it with the ability to invest patiently = until=20 such technologies as those perennially unveiled at CES -- at least some = of them=20 -- enter the real world.

joseph.menn@latimes.com =