At Microsoft's CEO Summit in Redmond this morning, Bill Gates showed a prototype called TouchWall, which the company described as a vertical version of its Microsoft Surface tabletop computer. Gates gestured across the screen with his hands to browse digital files on the screen, using a companion software prototype that the company calls Plex.

Microsoft Corp. today announced that the Xbox 360 video game and entertainment system has sold over 10 million units in the U.S., making it the first current-generation gaming console to break the 10 million mark in the U.S. The U.S. install base contributes to global sales of over 19 million.

“This year will be the largest in the history of the video game industry, with Xbox 360 leading the charge in the U.S. and abroad,” said Don Mattrick, senior vice president of the Interactive Entertainment Business in the Entertainment and Devices Division at Microsoft. “History has shown us that the first company to reach 10 million in console sales wins the generation battle. We are uniquely positioned to set a new benchmark for the industry.”

This announcement comes on the heels of one of the biggest entertainment launches in history, “Grand Theft Auto IV,” on April 29, 2008. Gamers eager to experience “Grand Theft Auto IV” online helped boost Xbox LIVE global membership to over 12 million this month. Fueled by an unparalleled combination of access to friends and family, the best online gaming features, and the best entertainment content, the Xbox LIVE service has doubled in membership in only one year’s time.

“Reaching an installed base of 10 million consoles in the U.S. is a significant achievement and an essential milestone on the road to market leadership,” said Billy Pidgeon, research manager at IDC. “Perhaps more important is the Xbox 360 worldwide online base — 12 million Xbox LIVE gamers is the largest community in the connected console games sector, which represents the greatest growth opportunity in the console market and where Microsoft has been the leader for two generations.”

Xbox 360 leads with the industry’s highest software attach rate, more than any other console this generation, and is home to the best-selling games. With the launch of “Grand Theft Auto IV” in April, Xbox 360 is now the home to more than 16 platinum titles that have sold through 1 million units or more, including hits such as “Halo 3,” “Madden NFL 07” and “Madden NFL 08,” “Gears of War,” “Guitar Hero II” and “Guitar Hero III: Legends of Rock,” and “Call of Duty® 2,” Call of Duty 3” and “Call of Duty 4: Modern Warfare,” giving Xbox 360 two times more platinum-selling titles than the Wii and a 16:2 lead over the PlayStation 3 in game titles topping one million in sales. Games not only sell better on the Xbox 360, they play better, too: Xbox 360 has 91 titles with a Metacritic review score of 80 or higher, compared with just 22 titles for Wii and 50 titles for PlayStation 3.

The final frontier got a bit closer today as Microsoft Corp. officially launched the public beta of its WorldWide Telescope, which is now available at http://www.worldwidetelescope.org. WorldWide Telescope is a rich Web application that brings together imagery from the best ground- and space-based observatories across the world to allow people to easily explore the night sky through their computers. WorldWide Telescope has been eagerly anticipated by the astronomical and educational communities as a compelling astronomical resource for students and lifelong learners, and as a way to make science fun for children.

“The WorldWide Telescope is a powerful tool for science and education that makes it possible for everyone to explore the universe,” said Bill Gates, chairman of Microsoft. “By combining terabytes of incredible imagery and data with easy-to-use software for viewing and moving through all that information, the WorldWide Telescope opens the door to new ways to see and experience the wonders of space. Our hope is that it will inspire young people to explore astronomy and science, and help researchers in their quest to better understand the universe.”

The application itself is a blend of software and Web 2.0 services created with the Microsoft high-performance Visual Experience Engine, which allows seamless panning and zooming around the heavens with rich image environments. WorldWide Telescope stitches together terabytes of high-resolution images of celestial bodies and displays them in a way that relates to their actual position in the sky. People can freely browse through the solar system, galaxy and beyond, or take advantage of a growing number of guided tours of the sky hosted by astronomers and educators at major universities and planetariums.

Customers and Microsoft Corp. partners can now visit http://www.MultiplyYourPower.com to find out how to evaluate pre-release versions of Windows Essential Server Solutions for small and midsize companies: Windows Small Business Server 2008 and Windows Essential Business Server 2008. Microsoft also today announced pricing for both solutions.

By combining Microsoft technologies such as Windows Server 2008, Exchange Server 2007, SQL Server 2008 and other Microsoft products and services into all-in-one IT solutions, Windows Essential Server Solutions help businesses improve efficiency, increase productivity and drive growth. The solutions also are ideal for technology advisors serving the increasingly sophisticated IT needs of small and midsize customers.

“Small and midsize companies are looking for many of the same IT capabilities and benefits as those sought by large enterprises,” said Ray Boggs, vice president Small/Medium Business Research at IDC. “But the technology has to be delivered as part of simpler, integrated and more affordable solutions for organizations with minimal IT staffs and resources. And of course it helps if solutions are also tailored to meet the needs of technology consultants that often work with those small and midsize firms.”

Microsoft Corp. and Research In Motion (RIM) today announced an agreement to provide Microsoft Windows Live services on BlackBerry® smartphones. As a result of this collaboration, BlackBerry smartphone customers will enjoy easy mobile access to Windows Live Messenger and an enhanced level of integration between Windows Live Hotmail and the BlackBerry platform.

The integration of Windows Live services into the BlackBerry platform will allow customers who use Windows Live Hotmail and Windows Live Messenger on their BlackBerry smartphone to benefit from the BlackBerry platform architecture with the ability to communicate in real time using push technology, and an exceptional mobile communications experience. Customers will also be able to seamlessly access their Windows Live Hotmail and Windows Live Messenger account from their BlackBerry smartphone by simply entering their Windows Live e-mail address and password once.

“The BlackBerry platform is respected around the world for providing optimized messaging capabilities, and RIM continues to look for ways to provide customers with a wide range of communications options and the best possible mobile experience,” said Mark Guibert, vice president, Corporate Marketing at RIM. “Our relationship with Microsoft and the addition of Windows Live services to BlackBerry smartphones help us build on that strategy for our customers.”

Among other features:

Windows Live Hotmail for BlackBerry will allow customers to do the following:

• Use BlackBerry “push” technology for automatic message delivery and message synchronization so customers’ online account is up to date with actions taken on their BlackBerry smartphone
• Use a dedicated inbox for Windows Live Hotmail messages, which are automatically delivered to the smartphone. Customers can also choose to receive their Windows Live Hotmail messages, along with messages from other e-mail accounts, within a single inbox on their BlackBerry smartphone
• Display HTML e-mail with the ability to view graphics, Web links and contact photos in e-mails

Windows Live Messenger for BlackBerry will allow customers to do the following:

• Send instant messages and join group chats
• Set status and see the presence of friends and colleagues within Windows Live Messenger or their contact cards
• Customize status messages
• Save conversations
• Showcase their Display Picture (Avatar)
• Send and receive pictures and files
• Use more than 60 emoticons

Microsoft filed an application with the Court of First Instance in Luxembourg, seeking to annul the Commission's decision from late February, in which it imposed a fine of 899 million Euros, or $1.39 billion, against Microsoft.

"We are filing this appeal in a constructive effort to seek clarity from the court. We will not be saying anything further," Microsoft said in a statement.

Given our commitment to advance notice, we wanted to use this blog as one of many avenues to alert our customers to the fact that we will be distributing SP1 automatically via Automatic Update beginning June 16th. The availability will happen gradually and not everyone will see it at the same time. Think of the 16th as the earliest possible start of distribution and that no sooner than that date will SP1 start to become available to customers' systems via this channel. This is necessary to ensure that our service infrastructure can meet the enormous demand for the service pack.

Asked if Yahoo would still leave a door open for Microsoft to return, [Yahoo! CEO Jerry] Yang said: "If they have anything new to say, we would be open. ... I am more than willing to listen."

But its two largest shareholders independently told The New York Times they would have sold for as little as $34.

"I am extremely angry at Jerry Yang and at the so-called independent board," Gordon Crawford, portfolio manager for Capital Research Global Investors, the largest Yahoo shareholder with some 16 percent of stock, told the newspaper.

Today, Microsoft Corp. and Hyundai-Kia Automotive Group (HKAG) entered into a long-term agreement to co-develop the next generation of in-car infotainment systems. Bill Gates, chairman of Microsoft, and Mongku Chung, chairman of HKAG, were present as Martin Thall, general manager of Microsoft’s Automotive Business Unit, and Hyun Soon Lee, president and chief technology officer of HKAG, signed the agreement in Seoul.

Together, Microsoft and HKAG will deliver new and innovative solutions based on the Microsoft Auto software platform, bringing the future of in-car technology to Hyundai-Kia drivers worldwide.

“These new systems will redefine consumer experiences in the car,” Thall said. “Since the spring of 2006, HKAG and Microsoft have been sharing their vision for the future of in-car technology. We’re now aligned to develop the next generation of in-car infotainment systems.”

“We are pleased to partner with Microsoft to deliver high-performance infotainment solutions to our customers,” Lee said. “The advanced capabilities, flexibility and low price point make the Microsoft Auto software platform an attractive solution for us.”

The first product, a next-generation infotainment system that provides voice-controlled connectivity between mobile devices, will be introduced in the North American market in 2010. It will further apply to Asian and European markets, and expand into multimedia and navigation devices. These easy-to-use infotainment systems will allow consumers to enjoy music in various digital formats.

The next-generation infotainment systems are comparable to mini-PCs. Even after product launch, new functions can be added or upgraded in the form of software program updates, an innovation to existing in-car multimedia technology.

The Hyundai-Kia Automotive Group’s adoption of the Microsoft Auto software platform increases Microsoft’s presence in the Asian car market and enhances the global automotive business. The engineering and marketing teams of Microsoft’s Automotive Business Unit in Redmond, Wash., will be working directly with counterparts at HKAG in Seoul to support this goal. Microsoft Auto-powered systems are currently available in Fiat Auto Group vehicles in Europe and South America and Ford Motor Co. vehicles in North America.

In a related announcement, Microsoft and Hyundai-Kia, along with the Institute for Information Technology Advancement (IITA), signed a memorandum of understanding (MOU) to co-establish an automotive IT innovation center with the goal of promoting innovation and opportunities for Korean software and device vendors in the global market.