“When we were an agrarian nation, all cars were trucks, because that’s what you needed on the farm,” Jobs said at D8. “But as vehicles started to be used in the urban centers, cars got more popular. Innovations like automatic transmission and power steering and things that you didn’t care about in a truck as much started to become paramount in cars. … PCs are going to be like trucks. They’re still going to be around, they’re still going to have a lot of value, but they’re going to be used by one out of X people.”

Two years after Jobs uttered those words, are we truly in the post-PC era, as he claimed?

Not according to Microsoft. During his Worldwide Partner Conference keynote Wednesday, Microsoft COO Kevin Turner said we’re not in the post-PC era, but the PC-plus era.

“I want you to know we believe that Apple has it wrong,” Turner said. “They’ve talked about it being the post-PC era. They talk about how the tablet and the PC are different. And the reality in our world, we think that’s completely incorrect. We actually believe Windows 8 is the new era for the PC-plus, and we think that’s very strategic for us going forward. And we believe that you can have a great content consumption and creation device be one and the same. We believe with a single push of a button you can move seamlessly in and out of both worlds. We believe that you can have touch, a pen, and a mouse and a keyboard. We believe you can have end-user security and management.”

Who’s right? Who cares?

Unless you’re still bound by the antiquated and frankly asinine idea that the iPad is not a content-creation device, Microsoft’s vision of the PC-plus world sounds an awful lot like the one that users of Apple products are already living in.

(Image courtesy of The Verge)

During the company’s Worldwide Partner Conference last year, COO Kevin Turner said Microsoft planned to open 75 brick-and-mortar storefronts over the next two to three years (see “Microsoft Opens Colorado Retail Store in Wyoming“). Revisiting those comments at the same conference today, Turner said Microsoft will have 44 retail stores by next June — about double the number it has now.

“We’re going to continue to build and roll out more stores,” Turner told Worldwide Partner Conference attendees. “More and more markets around are going to see the Microsoft Store, and this holiday, on the heels of the Windows 8 launch, we’re going to do some holiday pop-up stores throughout. And we’re going to keep going more and more pervasive. And you’ll see the store brand continue to go out and go out into the world with the opportunity we believe we have to tell the Microsoft story.”

A wise move, and one on which the success of the company’s new Surface tablet may well hinge. Recall that Microsoft plans to sell the Surface only through its own retail stores and Microsoft.com. With fewer than two dozen Microsoft Stores in the U.S. right now, consumers curious about Surface will have very, very few locations where they can play with it. And that might improve margins and make inventory and returns easier to manage, but it will inevitably limit sales.

(Image courtesy of Flickr/Rogsil and Microsoft)

Ballmer takes home a base salary of $682,000, and his bonus doubled it to just shy of $1.4 million. But it could have been higher. The board had the authority to award Ballmer a bonus worth up to 200 percent of his base salary and decided not to, opting instead to keep it at 100 percent.

But see, it’s not about the money. This is all the equivalent of change found under a couch cushion when compared to the worth of Ballmer’s holdings of Microsoft shares, which are worth about $14 billion or so. It’s about what Microsoft’s board thinks, especially at a time when some people have started to argue that it’s time for a change at Microsoft’s top.

There is, for instance, the issue of Windows Mobile, which Ballmer readily admits isn’t selling “as well as we would have liked.” And what about that 2 percent decline in Windows revenue?

The board’s verdict:

For fiscal year 2011, the Compensation Committee recommended and the independent members of our Board of Directors approved an Incentive Plan award of $682,500, which was 100% of his target award. The award was based on his performance appraisal and other relevant information considered by the independent members of the Board, including: Mr. Ballmer’s performance against his individual commitments; the operating income performance of the Company relative to 25 large technology companies (a group that includes most of our Technology Peers); successful product launches including Kinect for Xbox and Office 365, enhancements to Windows Azure and Bing; continued progress positioning the company as a leader in the cloud and cloud-based infrastructure; key partnerships with Facebook and Nokia; significant progress in development of the next generation of Windows; work toward the successful acquisition of Skype; lower than expected initial sales of Windows Phone 7; the 2% decline in revenue for the Windows and Windows Live Division; the need for further progress in new form factors; and an overall strong financial year in which Microsoft reported record revenue of $69.9 billion, record operating income of $27.1 billion, and record earnings per share of $2.69 representing 12%, 13%, and 28% growth, respectively.

Yay Ballmer. So how did the rest of the senior management team do? Here’s what the board says in the proxy filing.

CFO Peter Klein: He got $3.6 million, which was 120 percent of his target award, and credit for focusing on operating expenses and on the capital allocation plan, which resulted in $16.9 billion of cash returned to shareholders by way of share buybacks and dividends. He also did the due diligence on the Skype acquisition.

Kurt DelBene, president of the Microsoft Office Division: Annual revenue from the division increased 17 percent to $20 billion; Office 2010 was the fastest-selling version in the product’s history; and Office 365 got out the door. Plus Sharepoint, Exchange and Lync had “double digit growth.” Based on his fiscal year 2011 performance, DelBene received an incentive plan award of $7.25 million, 132 percent of his target award.

Steven Sinofsky, president Windows and Windows Live: Revenue is falling slightly in this group because of the decline in consumer PC sales, but Windows 8 is on the way. For all this Sinofsky, got $6.3 million or 90 percent of his target award.

Kevin Turner, COO: With Microsoft reporting annual revenue of $70 billion and operating income of $27 billion, up 13 percent, Turner earned an incentive plan award of $9.63 million, 110 percent of his target.

AllThingsD’s Ina Fried and I are being held hostage by nefarious Microsoft PR chieftain Frank Shaw in a soul-sapping ballroom in Anaheim, Calif. — within spitting distance of Disneyland’s “It’s a Small World” ride.

The agony — especially since we are about to be entertained by a series of Microsoft execs, including CEO Steve Ballmer, at its annual Financial Analyst Meeting. Yes, it is that kind of day, which included the delightful middle seat on a Southwest Airlines flight.

Here we go:

1:11 pm: There may be forward-looking statements. Well, I should hope so.

1:12 pm: Investor relations dude Bill Koefoed is reading from letters from folks about the Windows 8 look-see, which is also going on here.

It would be touching, except it is not. But I like Bill, who probably has a thankless job, so we’ll let him knock himself out!

1:17 pm: Okay, Bill, let’s move on, although making the execs tiles a la Windows Phone is a nice touch.

1:18 pm: But, no, we go over the financial results from FY11. Double-digit revenue growth, margin expansion, tons of cash, consumers love Xbox and Kinect!

So why does the stock remain so flat? It’s a mystery wrapped in an enigma, wrapped in shareholders who don’t want to give Ballmer much of a break.

Actually, it’s because Wall Street is spanking Microsoft for its slowness in the smartphone and tablet space, that Google is offering Office for free and that Windows is taking a back seat to the browser. Also that cloud thing.

1:21 pm: Most of the slides, including the agenda, have been designed to look like Metro-style “live tiles.”

Note to Redmond: While the interface scales nicely from the phone to the tablet, you may be taking it a bit far.

1:23 pm: First up, COO Kevin Turner, whose speech is call “Operating Momentum.”

He comes out like a football coach and tries to make us all greet him back. I don’t want to go all Larry David here, but one of the unwritten rules of society is that you don’t make anyone under 12 years old or not in a cult do the crowd echo thing.

But, bygones! Turner talks about the strong businesses of Microsoft, especially its Business Division, which is 32 percent of FY11 revenue. The money-losing Online unit is a paltry four percent.

1:30 pm: Turner makes some comparison related to spending, like “drunken sailors.” Say what?

Moving on …

Now for some more football-coachy stuff like “Leveraging & Accelerating Our Strengths!”

Which would be Windows, for the most part.

Next bromide: “Our Cloud Leadership is a Strength!”

Says Turner: Microsoft is “all in!”

Actually, technically, it would be “all up!”

(I am channeling Larry David today. Very innnnnteresssting. Very innnnnnteresting.)

Back to Turner, who promises a “cloud that’s right for every customer.”

1:39 pm: Microsoft really does like the Metro look. It’s freaking everywhere.

1:42 pm: Now: “Embracing the Consumerization of IT!”

There are four pillars of that, including Windows 8.

And now a bit about the growth of the costly Bing and winning in the cloud against Google.

“With Office 365, ladies and gentlemen, we now have a product” to compete, notes Turner, rather gallantly.

Also, Microsoft is smacking back VMware in virtualization.

Go team!

1:46 pm: As an aside, should the consumerization of IT really have four pillars?

1:47 pm: Time for CFO Peter Klein, whose tile reads “Our Opportunity.”

Klein looks like an accountant, which is not an insult, with a reassuring, by-the-numbers tone. It is almost lulling, as Klein’s voice often is on the quarterly calls — which always end up putting my assistant Ed immediately into the nap zone, since I listen to the calls on a speaker phone in the office.

Klein begins by pointing out that the markets in which Microsoft compete will double by 2015, including in gaming and online advertising.

It begs the question: Will Microsoft get a big slug of that?

1:53 pm: Klein goes over the various markets to underscore Microsoft will.

The first up is phone, where the company is trying to break through with Windows Phone. It’s been late, but is a pretty good offering that could become stronger with its hook-up with Nokia.

Next: The big dog of Office. It’s still big, Google or no.

Then: Business Infrastructure — private clouds, public clouds, big clouds and small clouds.

Online advertising is next, which is a weak spot for Microsoft and where it continues to lose money. Which is why Klein spends 33 seconds on it, before moving to the gaming slide.

In that arena, Microsoft does shine, with Xbox and Kinect as very innovative offerings.

1:59 pm: Latest slide from Peter Klein talks about a “balanced approach to capital allocation” with three tiles below it — “invest for growth,” “return cash to shareholders” and “balance sheet a strategic asset.”

If the live tiles in the slide were indeed buttons on a smartphone, I think many in the crowd would be pushing the middle option.

2:01 pm: Peter Klein notes the company’s Triple-A bond rating. Take that, Uncle Sam!

2:02 pm: Klein hands things over to search and online services head Qi Lu.

2:03 pm: Lu, the head of Microsoft’s online unit, is one of the uber-geeks at the company and has perhaps its hardest task.

That would be competing with Google.

While the division loses boatloads of money annually in the effort, Bing has also been a very impressive offering and has been slowly gaining share.

Winning in the space is indeed, as Qi is saying, key to its future.

He brings up the Yahoo online advertising and search partnership, which has been a bit rocky for both parties.

“We had some struggles, because the undertaking is very complex,” said Qi, noting that things have gotten better. “I have confidence we will be able to unlock the economic opportunities.”

Let’s hope so, for the Online unit’s sake.

2:12 pm: Lu says that the company said that the company now has the needed horsepower to compete. But it still needs something new. “To win in search we must break through, break through from where we are,” he said. “We cannot try to out-Google Google.”

2:17 pm: We’re posting some of the key slides from Microsoft’s analyst meeting in this companion post.

2:20 pm: I’ll admit, I checked out a bit here, in which Qi outlines the basics of what Microsoft is trying to do to develop intelligence in online search.

I have heard this speech before from him and it’s a good conceptual model. Investors, of course, only care about financial results.

The message is about “solving deep human needs and delivering compelling experiences,” says Qi.

Disconnect: Wall Street only wants revenue and profits.

2:24 pm: Still, it is nice that Qi dreams so Bing, oops, big.

Next up, Servers & Tools head Satya Nadella, who used to work for Qi.

Nadella is a smoothie speaker and he quickly launches into his spiel about a strong but lesser known part of Microsoft with $17 billion in revenue.

2:35 pm: Nadella is talking about Microsoft’s SQL Server, one of those not-so-sexy big money parts of Redmond’s business. Among those using it are Visa, which built its micropayments using SQL. The next version of the database, btw, is code-named Denali.

On to Office 365 — the cloud-based version of Office. One business signs up every 25 seconds, Nadella says.

2:38 pm: Now he’s updating on Windows Azure, Microsoft’s OS in the cloud. It’s built with enterprises in mind, he says, pointing to some recent customer wins.

Budget carrier Easyjet, for example, has an internal app for their airport workers that runs on connected devices that then talk to Azure.

2:41 pm: The strategy is a mix of public and private clouds.

“In conclusion, our cloud strategy is to cloud optimize every business,” Nadella says, before giving way to Steve Ballmer.

2:46 pm: It’s either the longest or shortest FAM, jokes a golf-shirt-wearing Ballmer.

His tile: “Our Point of View.”

Ballmer has been here for the Windows 8 event and notes how well it seems to be going so far.

“We are seeing some positive reaction,” he says, posting some of the compliments from places like the “Twitter feeds.”

2:49 pm: Ballmer has an unusual way of speaking I always forget about, even though I have heard him talk eleventy-hundred times.

It is an up-and-down, sing-song style, in which he punches the heck out of some words.

Like: “World VIEW” and “Windows is AT the center.”

Which is Ballmer’s first point, because Windows is still Microsoft’s mainstay.

2:52 pm: He runs through the key themes — besides Windows — and they include: New hardware; natural interface, cloud, enterprise and consumer; and “1st party” applications, which means Office and such.

“These form some of the core elements,” says Ballmer, trying to knit it all together and make it not seem that Microsoft is the giant, confusing behemoth that many think it has become.

Ballmer is talking about getting the slowness of “mojo” in the business applications arena, but it could be said about its Windows Phone mobile strategies.

Which is next: “We haven’t sold quite as many,” said Ballmer, but notes “enthusiasm” for the platform.

2:57 pm: “I am not saying I love where we are, but I am very optimistic about where we can be,” he says. “We just have to kick this thing to the next level.”

Actually, about 12 levels. But who’s counting? (The Larry David of tech, that’s who!)

2:58 pm: Ballmer starts the every-word-LOUD about Office.

Why not? It is a huge business for Microsoft after all these years.

Ballmer calls Office “the biggest quiet opportunity.” I will admit it: I like it when a loud dude talks about quiet.

Now an Office demo of Lync, Microsoft’s unified communications offering.

3:07 pm: It is a cool demo, especially the translation part.

The Skype acquisition gets a mention too, with Ballmer noting in a modified Tony the Tiger: “It’s greeeeat.”

We’ll wait and see if Skype head Tony the Bates will deliver.

It’s soon onto Xbox and Kinect, which is decidedly great for Microsoft.

Ballmer notes there will be a lot more video and television offerings on Microsoft.

There is a demo that has some glitches, which is impressive anyway. Obviously, Microsoft is hoping Xbox becomes the home entertainment hub and discovery service (via Bing).

3:20 pm: Live TV is also a big deal, apparently, which is coming to the Xbox.

Finally, Ballmer sums it up, noting things are changing fast.

He says he gets it that investors worry if the company gets it.

“I am very optimistic about our future,” Ballmer concludes, punching NO words.

3:24 pm: It is now on to Q&A, which will also include Windows head Steven Sinofsky.

Goody, goody.

3:25 pm: First question is on whether Microsoft is bringing Office to the new-look Windows. That’s a big one.

Ballmer doesn’t firmly commit, but notes that Microsoft wants to support its platforms with applications.

“We are rethinking and working hard on what it would mean to do Office Metro-style,” Ballmer says.

3:27 pm: Second question on which apps will work on ARM-based Windows, another key question.

Sinofsky reiterates that Windows 7 machines will be able to run all apps in Windows 8 (but of course all Windows 7 machines are Intel or AMD-based, not ARM). Apps written for x86 won’t run on ARM, but all new-style apps will work on both.

Sinofsky notes that if all older apps were allowed to be ported to Windows-on-ARM, the ARM-based systems would lose some of their advantages when it comes to things like battery life.

3:30 pm: Next question is on the opportunity for Windows Phone in the enterprise, noting that most of the recent work on Windows Phone has been on the consumer side.

“The most important thing is to capture the imaginations of people,” he says, noting that they have both work and personal lives.

He notes Mango release has some improvements for businesses.

3:32 pm: Asked if the tablet market will enter the enterprise like the phone, Ballmer notes that consumers will buy lots of different devices and there is always the question of which machines the enterprises will allow in. Some tablets will come in that way, he said.

“We embrace that concept,” Ballmer says.

Sinofsky notes that the proposition of having a tablet that can turn into a serious work computer just by adding a keyboard will have significant appeal.

As for touch, he reiterates his contention that once people use a touch-based Windows 8 machine, they will soon start touching every PC they use.

3:38 pm: Analyst asking in a roundabout way whether Microsoft expects to do better than the 10 percent annual revenue rate it has had over the last five years.

CFO Peter Klein is not biting: “Our view is the opportunity is tremendous. It’s as great as it ever has been.” But market also competitive and fast-changing.

3:46 pm: Finally, a question about Yahoo and the firing of CEO Carol Bartz and all the other uncertainty there.

While Ballmer did the online search and ad partnership deal with her, this hot potato gets handed over to Qi Lu. Thanks, Steve!

The contract survives change of control, he says. “That does not really impact day to day,” says Qi about the Bartz ouster.

Then Ballmer decides to weigh in: “Hundreds of millions of people every day using those services. … No matter where they take their business …”

In other words: He has no idea!

3:49 pm: Next! What about bottom-line growth dropping over the next few quarters?

Klein said Microsoft is focused on the long term and it was not making a guidance statement.

Ballmer: “We’ll give you no guidance. None.”

Anyway, all the markets are growing! Did we not stress that?

3:52 pm: Well, what about a new pricing strategy?

No dice!

The Microsoft execs look a little weary and in need of some cocktail fare. Wait, that’s me.

More on upgrade from Windows 7 and how all these many devices from many companies will work fine together.

Ballmer notes that Bing and Skype will continue to support Google Android and Apple iOS.

It is a small world after all!

3:58 pm: Last question!

One on Office 365 and how it is doing.

COO Turner is back as the coach of Team Microsoft: Great, just great.

Later this morning, I will scramble the private ATD jet to make my way down south to Anaheim for Microsoft’s annual Financial Analyst Meeting.

That’s right: A bunch of Wall Street types, asking not very challenging questions of top Microsoft execs in a ballroom perilously close to Disneyland.

Taking place this afternoon, starting at 1 pm PT, the confab will include appearances by its top execs, including CEO Steve Ballmer, CFO Peter Klein, COO Kevin Turner, Online Services President Qi Lu and Satya Nadella, who helms the Servers & Tools division of the software giant.

There will be lots to discuss at the confab, including: What is up with Microsoft’s search and advertising partnership now that Yahoo CEO Carol Bartz — who struck the deal — was ousted, and whether it is involved in a possible bid for the Silicon Valley Internet giant again; an update on the Windows Phone business; prospects for Windows 8, which the company just highlighted at its huge developers conference there; questions about its nascent tablet business; comments on Google’s recent moves, including its purchase of Motorola Mobility; and, of course, how Ballmer sees his own tenure at Microsoft, given its longtime lackluster stock performance (paging investor David Einhorn!).

In other words: Mr. Ballmer’s Wild Wall Street Ride!

Look for my live blog from the event later today.

Related posts

• Exclusive: Making Sense of Our First Look at Windows 8
• Windows 8 Gets Ready for Its Big Debut
• Gearing Up for Microsoft’s Big Week
• Microsoft Details Windows 8 at Build Conference in Anaheim
• What We Just Learned About Windows 8
• Microsoft Releases First Test Version of Windows 8
• Windows 8 Forces Some Compromises After All
• Boys and Their Toys: Developers Rush to Get Windows 8 Tablets
• Windows 8 Shows Its Server Side
• Ballmer: 500,000 Downloads of Windows 8 Since Last Night

Microsoft currently has 11 retails stores in the United States. Three years from now it will have 86.

During Microsoft’s Worldwide Partner Conference today, COO Kevin Turner said the company will open 75 more brick-and-mortar storefronts over the next two to three years. Said Turner, “We’ve got a huge opportunity to get the Microsoft story out there.”

This will account for a significant expansion of Microsoft’s first retail settlements which to date have been limited to cities in California and a handful of other states, including Colorado — which Microsoft evidently believes to be located in Wyoming.

A wise move, particularly with more Windows Phones headed to market. As Microsoft CEO Steve Ballmer conceded last week, Microsoft’s smartphone share has gone from “very small to very small.” An expanded retail presence in key markets could do something to change that.

His title will be senior vice president of the Consumer Channels and Central Marketing Group, and he will report to COO Kevin Turner.

Capossela is a 20-year Microsoft veteran who previously ran the Microsoft Office Division. He helmed the launches of Office 2007 and 2010 and related server products. He was also instrumental in ushering Office into the cloud with Office Web Apps and Office 365. Before that he held several other jobs within Microsoft, including a stint as speech assistant to Microsoft founder and former CEO Bill Gates.

Here is a video from last year in which Capossela is talking with, oddly enough, ATD’s own Ina Fried (who was at the time only weeks away from announcing she would join ATD, I should note) about Office 365.

Microsoft on Thursday reported earnings and revenue that topped expectations and rose significantly from a year ago amid strong sales from its Xbox unit.

For the three months ended Dec. 31, Microsoft earned $6.63 billion, or 77 cents per share, on revenue of $19.95 billion. The per-share number is up from 74 cents a year ago and ahead of the analysts’ average prediction of about 68 cents per share.

“We are enthusiastic about the consumer response to our holiday lineup of products, including the launch of Kinect,” CFO Peter Klein said in a statement. “The 8 million units of Kinect sensors sold in just 60 days far exceeded our expectations,” said Peter Klein, chief financial officer at Microsoft. “The pace of business spending, combined with strong consumer demand, led to another quarter of operating margin expansion and solid earnings per share growth.”

Not only were the results ahead of estimates financially–they were also ahead of estimates chronologically, as the company accidentally released the information before the end of regular trading on Thursday. Results were expected to be released after the closing bell.

“A preproduction draft of our earnings release was discovered by one or more media sources who then published our results to the web before market close,” Microsoft said in a statement. “After consulting with NASDAQ, we have posted our official numbers. We apologize for any confusion and will review our procedures to ensure this does not happen again.”

With the results from the past quarter, Apple passed Microsoft slightly in quarterly revenue, but did not–as some analysts thought might happen–surpass Redmond in profits as well. The company also noted it bought back $5 billion in shares during the quarter and handed out $1.3 billion in dividends to shareholders.

The gaming unit wasn’t the only part of Microsoft going strong. Redmond said its Office unit also had a big quarter, growing 24 percent from a year earlier, and that Windows 7 license sales have now passed 300 million.

“Business demand for our productivity and infrastructure products and cloud solutions is strong,” COO Kevin Turner said in a statement. “Office had a huge quarter, exceeding everyone’s expectations, and our roadmap for cloud productivity with Office 365 makes products like SharePoint, Exchange, Lync and Dynamics CRM even more attractive to our customers.”

The company noted in a PowerPoint presentation accompanying its results that nine out of 10 businesses have now started their formal migration to Windows 7. Turner also pointed to Microsoft’s longer-term move to bring Windows to ARM-based processors.

“Windows 7 continues to be the fastest-growing operating system in history, and our recent system-on-a-chip announcement demonstrates our commitment that Windows will have the power and flexibility to run everywhere and on every device,” he said.

The company also said its online advertising sales were up 23 percent during the quarter.

However, Microsoft’s outlook was limited, offering guidance only for what it expects its operating expenses to be. In the PowerPoint, Microsoft offered a bit more information, detailing its unit-by-unit expectations relative to their markets. For example, the company said that Windows growth should roughly track the PC market, adjusting for some boost the company got a year ago from the launch of Windows 7. Server sales should also track the hardware market, with long-term licensing and services revenue growing in the high single digits for the current quarter and low double digits for the full fiscal year, which runs through the end of June. The company said the entertainment unit should enjoy year-over-year revenue growth of 50 percent for the current quarter and 40 percent for the full fiscal year.

Here’s a full look at the company’s segment-by-segment results (click to enlarge):

Microsoft had its annual Financial Analyst Meeting at its Redmond, Wash., campus yesterday, where BoomTown liveblogged the morning and afternoon sessions with the software giant’s top execs.

That included CEO Steve Ballmer, who talked about how a tablet device to compete with the Apple (AAPL) iPad was coming from Microsoft “soon” and also the company’s efforts in its eight “core” businesses.

And, because it is Microsoft (MSFT), there were lots and lots of slides to look at, which are all below from its panoply of execs on everything from finances to robotics to Facebook on the Windows Phone 7.

Here they all are for your data-crunching pleasure (and you can also read transcripts of the day’s events on Microsoft’s newly refreshed investor site.

CEO Steve Ballmer:

Ballmer_FAM_2010_Part1

COO Kevin Turner:

Turner_FAM_2010

CFO Peter Klein:

Klein_FAM_2010

Bill Koefoed, General Manager, Investor Relations:

Koefoed_FAM_2010

Craig Mundie, Chief Research and Strategy Officer:

Mundie_FAM_2010

BoomTown has been in Redmond, Wash. today to attend Microsoft’s annual Financial Analyst Meeeting, where top execs from the software giant have been taking the stage to talk about All Things Microsoft.

I liveblogged this morning’s sessions here, and now the afternoon opened with CEO Steve Ballmer.

The pugnacious exec has been under a little bit of pressure from Wall Street, due to the company’s naggingly limp stock price, even though Microsoft (MSFT) just turned in record results for its fourth quarter

He has even been subject to an ongoing series of rumors, scuttling around the tech sector, that Ballmer would even be replaced due to the moribund shares.

That did not happen today, with Ballmer appearing as confident as ever, very loud and proud, hanging out and kibitzing with investor dudes (they are all dudes here, for the most part) at the technology showcase after the morning session.

Like a particularly aggressive tour director on “The Love Boat,” in fact, he even ordered the analysts to go see all the stuff on display, such as a mobile data center, Windows 7 Phones and its gesture gaming technology now called Kinect.

We complied.

After a lovely lunch, here is a report of the action at the afternoon session at FAM:

1 pm PT: Ballmer took to the stage to talk about Microsoft’s consumer businesses.

First to get praise: Xbox, a money-losing, but very innovative business.

Read the screen: FY10 A Great Year. FY11: Even better.

Ballmer was hot on Kinect, which will be “wow.”

Next: Bing!

Share was from eight to 12.7 percent, frequent releases, mobile focus and strong brand awareness.

Yay. Except the part about Google (GOOG) still having a 70 percent share of the search market.

“We’re not confused, we have a lot of work to do here,” said Ballmer, who noted the price tag for competing in search was high. “It’s going to take a lot more.”

A lot.

Office 2010 was next and it’ll be cloudier, touchier, socialier than ever.

Next up: Windows 7–a definite home run, with an almost 93 percent share on laptops.

“Suffice it to say, Windows is the tide that floats all boats,” said Ballmer.

That is, of course, except that PCs are being inevitably supplanted by many other types of other consumer devices.

Thus, Ballmer moved onto tablets, which he called slates and convertibles.

He took some shots at Apple (AAPL), and promised something would be coming soon.

It better.

Ballmer did admit the truth: “They’ve sold certainly more than I’d like them to sell, let me just be clear about that.”

Then it was onto a demo of some new stuff, including the availability of a “Personal Cloud” for users of Windows 7 and Windows Phone 7.

Essentially, as many companies have been trying to do, it a way for consumers to have access to photos, music and more anywhere on any device.

There was also a new Windows synch feature, which is part of this anything-anywhere-anytime-any device theme.

At this point in the afternoon, I have to say that the thought of a hyper-sharing world of endless data shooting all over the place was exhausting.

I suddenly started thinking about starting a site called Hermit.com–please don’t visit, as I have nothing to share with you and I don’t care what you’re doing either.

Where were those sugary donuts, Microsoft?

I perked up at the demo of the Windows Phone 7, which is very slick and looks terrific. As with Bing, it is nicely differentiated from Apple’s iPhone or Google’s Android mobile operating system.

There is some nice automatic integration in the Windows 7 Phone with Facebook, the powerful social networking platform, with cool blue dots as the updating signal.

2:06 pm: Ballmer was back, declaring he’s not only a PC, but “I’m a Phone too!”

Not quite as catchy a motto, but I like the effort.

Ballmer also touched on Microsoft’s retail stores, which I like to call Not-Apple-But-They-Look-Like-Them Stores.

Next up: CFO Peter Klein, whom I have never seen in person. Let me say, compared to most Microsoft execs, he is unusually young looking, as if he just got his driver’s license.

But he is clearly a smartie, pulling out all the big graphs of money stuff, discussing the economics of the cloud and how it will will result in profit growth.

Many wish the boxed software business did not have to die, but it is on its last legs, so it’s time to hug the cloud for dear life

Klein’s argument that it will all be okay: Microsoft will sell to more users, they’ll earn more per customer and customer satisfaction is increased.

He walked through the numbers, which have been good, noting he hoped for more of the same.

2:31 pm: It’s Q&A time, with Ballmer coming out and calling for “ENERGY!” from the group.

If there were donuts, perhaps! Otherwise, it’s more of a snoozy afternoon situation. Zzzzzzz.

While waiting for other execs to get onstage, Ballmer made a kind of humble-pie statement for shareholders, noting he is a big one too and wanted the stock price higher.

“I’m all in,” he declared, noting he still held 86 percent of his shares in Microsoft since he arrived decades ago.

Of course, that 14 percent represents billions of dollars to have to scrape by on.

The first question was: Wassup with tablets? “It feels like right now you are not completely clear,” said the questioners.

Ballmer was a bit defensive, with his voice going up and up some more. It’ll use Intel (INTC) chips and Windows, but he was still not more specific.

“We’ll be in market as soon as we can,” he said, which was to say that he was not saying.

The next few questions were about financial details and costs. Again, Ballmer noted the returns were strong and other execs said the company had discipline.

More about the cloud, which COO Kevin Turner continued to declare was a big focus. “The proof’s in the pudding,” he said. “But clearly, we have to execute.”

Another question about the tablet, which seemed to annoy Ballmer, who made a lot of noise about being ready to compete.

One tidbit: The Windows 7 tablet will print.

Wheeeee!

After declaring Google’s Android, a “weird collection” of phones, he repeated that Microsoft was all in with its tablet.

Well, get in then!

A good question is asked about what Ballmer thought would be a good sign of progress on mobile phones a year from now.

Well, more share and to stop the downward slide of it.

Then a key question: What if Windows 7 Phone does not work, if it is like the failed Vista operating system software.

For the first time, Ballmer answered quietly: “It won’t be.”

And, then much louder, he’s all in.

BoomTown took the corporate All Things Digital jet–aka Virgin America, seat 10A–up to Redmond, Wash., today to attend Microsoft’s annual Financial Analyst Meeting, which also includes a passel of media drones like me.

I will be liveblogging the event all day, which is essentially a cavalcade of top execs from the software giant taking the stage and showing off their wares.

There should be a little bit of swanning, since Microsoft (MSFT) turned in very good financial results last week, posting a huge increase in earnings and revenue due to the uptick in PC sales and the intro of the Windows 7 operating system. Losses at its Online Services division remained high, so thank goodness for servers and tools!

Here we go:

8:15 am PT: I was late due to the completely confusing streets of suburban Redmond, all of which look exactly alike, as does every building on Microsoft’s sprawling campus. I am a streets of San Francisco girl, obvi.

In the Conference Center, though, things had not started well past the 8 am start time, as we await the entry of investor dude Bill Koefoed.

U2′s “Beautiful Day” was playing over the sound system, which it was not up here in the Pacific Northwest this morning–it was kind of cold and gloomy, a la “Twilight”–but hopefully will be for sparkly Microsoft execs. We’ll see!

Finally, Koefoed came out and started in on feedback, touting the newly renovated investor relations site, which he is “pretty proud of.” It is nice looking, as are most of Microsoft’s hand-out materials.

In fact, he sent me an excited note last week, because I posted Microsoft’s pretty fourth-quarter slides.

Dear Bill: You need much better things to get excited about! Like the new Magic Trackpad from Apple (AAPL)! Wait, I mean Windows Phone 7!

Koefoed moved quickly to point out last week’s strong results, which is no surprise. When you’ve got lemonade, make more lemonade!

Then he outlined the various Microsoft’s eight “core” businesses, such as Xbox, Bing, Microsoft Office, Windows Azure and, of course, Windows, that the company will be going over.

That’s a lot of core, isn’t it?

Some questions to be answered: Business PC refresh and share momentum? Impact of iPad/slates? Windows 7 phone? Expense control?

Beautiful or not, it was going to be a looooong day.

8:42 am: A jaunty Kevin Turner, Microsoft’s COO, bounded out. He tried to get the crowd more lively, but this was not to be unless there was a lot more coffee.

I had great hopes for a goofy quote this morning from Turner, who declared at the Microsoft Worldwide Partner Conference earlier this month about Apple’s antenna controversy: “It looks like the iPhone 4 might be their Vista, and I’m okay with that.”

I don’t know about you, but insulting a competitor by shooting off your own foot is a gift that keeps on giving to me.

In any case, Turner said Microsoft was now “leading with the cloud,” a move that the company had been resisting in the past. Now: All in!

He outlined all the various services for business customers. “We are the market leader in cloud services for business,” said Turner, noting Microsoft had been too quiet about the inevitable move of data and software services to big services in the digital sky.

(Actually, in its secret heart, Microsoft was hoping this whole Internet thing would go away and it would be back to a PC on every desktop, but that horse has left the barn, so it’s cloud time!)

Next up for Turner: The much deserved popularity of Windows 7. Of course, since Vista was Microsoft’s Antennagate–except much, much, much worse–it was not hard to be better.

Turner then moved on to bashing Google (GOOG) and other competitors. Turner put up some quotes from Jaguar employees, after the car company switched to Google for email and other services.

One said Google was like vinyl seats. Ziiiiing!

Next Turner victim: VMware (VMW)! He claimed its products were pricier and not cloudy enough.

As for Linux: Meh!

Oracle (ORCL): Customers don’t want to be locked into the land of Larry Ellison!

Cisco (CSCO): Just you wait, John Chambers!

9:19 am: Turner headed off and Chief Research and Strategy Officer Craig Mundie started in on his speech, titled “Reimagining Microsoft’s Future.”

That would be the client plus the cloud, natural user interface and something he called “working on your behalf.”

Mundie launched into his future-dude schtick, but he’s not exactly Alvin Toffler, so I started desperately mainlining the caffeine.

He talked about movable data centers, the “Internet of Things” and other cloud innovations, but there is no new idea here to blow your mind.

Is it too much to wish Mundie would talk about an invisibility cloak? Instead, it was the orchestration of data authority.

That will apparently be a new data marketplace product, codenamed Dallas, to shop for giant data sets and more.

Mundie than showed off some personalization-driven features in the Bing search service, which are also not new concepts.

For example, he showed a menu, embedded in a table, that might know what you like to eat at a particular restaurant you frequent.

This is what would be on my table and there is no need of a fancy computer table to know this: Donuts, donuts, donuts.

Speaking of which, FAM minions: Where the heck were my donuts?

Mundie then moved onto Kinect, once called Project Natal, the actually cool gesture interface for gaming that will be available for Xbox soon.

Finally, he finished up with a video clip of a medical triage assistant. Great, even less customer service from hospitals. The demo was flatly freaky.

The morning session wrapped up with a visit to the technology showcase to “expect the unexpected,” although I was not expecting that in any way, and then it was off to lunch.

Next up in the afternoon session: CEO Steve Ballmer at 1 pm PT.

Wall Street had high hopes for Microsoft’s latest financials, and the company did not disappoint. Fueled by a strong PC upgrade cycle, it turned in a record fourth quarter with sharp gains in both profit and sales.

Net income rose to $4.5 billion, or 51 cents a share, from $3 billion, and revenue to $16.04 billion from $13.1 billion. Analysts had been expecting earnings of 46 cents a share on $15.2 billion in revenue.

“We saw strong sales execution across all of our businesses,” Microsoft (MSFT) COO Kevin Turner said in a statement.

And indeed it did. Windows revenue rose to $4.5 billion from $3.2 billion in the same period last year. Profit for the company’s Windows division rose to $3 billion from $1.9 billion.

At Microsoft’s Business division, which includes its Office suite of software, revenue rose to $5.3 billion from $4.6 billion, and profits to $3.3 billion from $2.7 billion.

And the company’s Online Services division saw its revenue rise to $565 million from $501 million, though its loss grew as well–from $585 million to $696 million.

Below, the earnings release:

Microsoft Q4

Ugly times. But what a difference a year makes.

Microsoft (MSFT) just reported earnings for its second fiscal quarter, posting significant gains in sales and profits. Net income for the period rose to $6.66 billion, or 74 cents a share, from $4.17 billion, or 47 cents a share in the same period last year. Meanwhile, revenue rose 14 percent to $19.02 billion. Analysts had been expecting earnings of 59 cents a share, and $17.9 billion in revenue.

“Exceptional demand for Windows 7 led to the positive top-line growth for the company,” chief financial officer Peter Klein said in a statement. “Our continuing commitment to managing costs allowed us to drive earnings performance ahead of the revenue growth.”

The release below. Kara Swisher will be covering Microsoft’s earnings over at BoomTown later this afternoon.

Microsoft Reports Record Second-Quarter Results

REDMOND, Wash., Jan 28, 2010 — Microsoft Corp. today announced record revenue of $19.02 billion for the second quarter ended Dec. 31, 2009, a 14% increase from the same period of the prior year. Operating income, net income and diluted earnings per share for the quarter were $8.51 billion, $6.66 billion and $0.74 per share, which represented increases of 43%, 60% and 57%, respectively, when compared with the prior year period.

These financial results include the recognition of $1.71 billion of deferred revenue, an impact of $0.14 of diluted earnings per share, relating to the Windows 7 Upgrade Option Program and pre-sales of Windows 7 to OEMs and retailers before general availability. Adjusting for the deferred revenue recognition, second-quarter revenue totaled $17.31 billion, and diluted earnings per share totaled $0.60 per share.

“Exceptional demand for Windows 7 led to the positive top-line growth for the company,” said Peter Klein, chief financial officer at Microsoft. “Our continuing commitment to managing costs allowed us to drive earnings performance ahead of the revenue growth.”

Windows 7 and Windows Server 2008 R2 launched globally on October 22 as anticipated. Through the second quarter, Microsoft has sold over 60 million Windows 7 licenses making it the fastest selling operating system in history.

“This is a record quarter for Windows units,” said Kevin Turner, chief operating officer at Microsoft. “We are thrilled by the consumer reception to Windows 7 and by business enthusiasm to adopt Windows 7.”

Business Outlook

Management will discuss second-quarter results and the company’s business outlook on a conference call and webcast at 2:30 p.m. PST (5:30 p.m. EST) today.

In addition, Microsoft offers operating expense guidance of $26.2 billion to $26.5 billion, for the full year ending June 30, 2010.

Posting fiscal 2010 first-quarter financials before market opening this morning, Microsoft (MSFT) said it earned 40 cents a share on revenue of $12.92 billion.

And while net income per share was down 17 percent from a year earlier thanks to declining revenue in all but one of the company’s businesses, it still bested analysts’ estimates, which called for a profit of 32 cents a share.

And although sales fell for the third consecutive quarter, dropping 14 percent to $12.9 billion, they too topped forecasts of $12.4 billion.

The software giant attributed the performance to strong Windows and Xbox demand and to cost discipline.

Shares in the company spiked more than 10 percent in premarket stock trading.

(You can peruse slides of the financial results here and a liveblog of the conference call here.)

“We are very pleased with our performance this quarter and particularly by the strong consumer demand for Windows,” said Chris Liddell, CFO at Microsoft. “We also maintained our cost discipline, which allowed us to drive strong earnings performance despite continued tough overall economic conditions.”

Here is the press release on the Q1 results (without performance tables, which you can see here):

Microsoft Reports First-Quarter Results

Windows and Xbox exceed expectations due to strong consumer demand; cost discipline drives earnings per share growth.

REDMOND, Wash.–Oct. 23, 2009–Microsoft Corp. today announced revenue of $12.92 billion for the first quarter ended Sept. 30, 2009, a 14% decline from the same period of the prior year. Operating income, net income and diluted earnings per share for the quarter were $4.48 billion, $3.57 billion and $0.40 per share, which represented declines of 25%, 18% and 17%, respectively, when compared with the prior year period.

These financial results reflect the deferral of $1.47 billion of revenue, an impact of $0.12 of diluted earnings per share, relating to the Windows 7 Upgrade Option program and sales of Windows 7 to OEMs and retailers before general availability. Adding back the deferred revenue, revenue totaled $14.39 billion, a 4% year-over-year decline, and EPS totaled $0.52 per share, an increase of 8% over the same period of the prior year.

“We are very pleased with our performance this quarter and particularly by the strong consumer demand for Windows,” said Chris Liddell, chief financial officer at Microsoft. “We also maintained our cost discipline, which allowed us to drive strong earnings performance despite continued tough overall economic conditions.”

Windows 7 and Windows Server 2008 R2 launched globally on Oct. 22 as anticipated. Also during October, Microsoft released Microsoft Exchange Server 2010 to manufacturing and in July announced a strategic partnership with Yahoo! Inc. to provide search results for their global properties.

“The worldwide launches of Windows 7, Exchange Server 2010 and Windows Server 2008 R2 are exciting milestones for Microsoft, our partners and customers,” said Kevin Turner, chief operating officer at Microsoft. “We are pleased by the early positive response we are receiving for these products.”

Business Outlook

Microsoft is reducing operating expense guidance to $26.2 billion to $26.5 billion, for the full year ending June 30, 2010.

Management will discuss first-quarter results and the company’s business outlook on a conference call and webcast at 7:30 a.m. PDT (10:30 a.m. EDT) today.

BoomTown happens to be in the Seattle area today, deep in the heart of Microsoft territory, which apparently is now living in a state of “new normal” according to a missive by the software giant’s CEO, Steve Ballmer.

Well, it all looks the same to me, but in an “executive e-mail” post yesterday titled “The New Efficiency,” Ballmer has continued to stress a theme he has been sounding since earlier this year about how the entire business ecosystem has to reset itself.

Of course, the “new efficiency” is also the new buzzword around the upcoming launch of Windows 7 and part of an event Microsoft had in San Francisco yesterday, as well as a Web site.

Now, that’s efficient!

Wrote Ballmer in the long post:

“So what is the nature of this shift? After years of economic expansion fueled by unrealistic rates of consumption and unsustainable levels of private debt, the global economy has reset at a lower baseline level of activity. Today, people borrow less, save more, and spend with much greater caution.

“This is the new normal and it will be with us for some time to come. The issue now is how to respond.”

At the same time, in its proxy filing with the Securities and Exchange Commission in advance of its Nov. 19 annual meeting, Microsoft (MSFT) also revealed that the direct compensation of its top execs had been cut rather significantly in 2009 compared to 2008, even though the figures are still large to most average people.

Previously, Microsoft had announced that it had frozen merit-based raises for these execs.

Noted the proxy:

“Reflecting the company’s performance during the severe economic downturn, our executive officers, taken as a group, received Incentive Plan awards equal to 77% of their target awards and 29% lower than the comparable cash bonus and stock awards for fiscal year 2008.”

This was mostly due to declines in the “fair market value of the stock awards at grant,” which Microsoft tried to compensate for in a small way, mostly via increased cash incentive payments.

Ballmer, for example, took in $1.265 million compared to $1.34 before, while COO Kevin Turner’s take-home went from $8.6 million to $5.4 million.

And CFO Chris Liddell–who has been sounding the economic alarm at Microsoft over the last year as its results have weakened, but in a jauntily charming Kiwi accent–took in $3.5 million, down from a previous $4.8 million.

Said the filing about the exec haircuts, which you can read about in detail here:

“In each case, financial results were less than expected due to the impact of worldwide economic conditions on our business. As a result, the Incentive Plan awards to our named executive officers for fiscal year 2009 were below both the target level for their awards and their actual fiscal year 2008 incentive compensation awards.”

Pretty glum overall, much like the rainy winter-is-coming weather that has arrived here in the Pacific Northwest.

Still, in his post–in which he touts the upcoming Windows 7 and other Microsoft products as helpers to ease the economic pain, natch–Ballmer (pictured here at a recent analysts meeting) noted the silver lining in the dark clouds:

“I’m optimistic because I believe we are entering a period of technology-driven transformation that will see a surge in productivity and a flowering of innovation.”

Until then, apparently, as Ballmer also wrote: “With less, do more.”

As the wind-up act for the Financial Analyst Day at Microsoft today, its CFO, Chris Liddell, took the stage to try to put a shine on weak financial results that the software giant recently reported.

“So, what genetic disposition do you need to be a CFO? Essentially, you need to be miserable, you need to be the sort of person who takes drinks away from people at the end of a party,” said Liddell. “So, you know, my colleagues who have been giving you drinks all day, have told me to come out here and take most of them away from you.”

This was an unusually charming opening for typically dull CFOs, made even more so since it was delivered in Liddell’s jaunty New Zealand-Hobbit accent, which turns words like “share” into “sheeaar” and “schedule” into “shed-you-all.”

But no matter how cute the delivery, Liddell could not make the recent financial performance at Microsoft (MSFT) look adorable. The company missed revenue estimates by $1 billion in its most recent quarter.

Said Liddell: “And, not surprisingly, from a revenue point of view, it turned out to be a fundamentally different year than we thought it would. So, when I stood up here last year and said we thought our revenue would grow, it actually shrunk by three percent.”

Liddell dubbed the new economic situation the “new normal,” which sounds like it could be the topic on an “Oprah” show.

Still, Liddell, who has been a grumpier CFO than most during this econalypse–I once dubbed him “Glum Chris at the Recessiondome”–was more positive going forward.

“I can’t say this is good that we’re still down relative to where we were a year ago,” he said. “But, on a relative basis, it was a reasonable year from a shareholder value point of view, given the context of the environment that we had.”

Liddell said Microsoft was now operating in a “reset” mode, a term often used by Microsoft CEO Steve Ballmer.

“The economic path that we are all going to face, regardless of any industry, is going to be relatively subdued compared to what we’ve been through,” he said. “So, those companies that are going to drive superior shareholder value in the new environment are not only going to be the ones that mapping the reset in a very good way, but are going to manage the new normal in a particular way as well.”

That means having cash, controlling costs, pushing for innovation and market share, said Liddell.

He forgot to add judicious coupon-clipping!

After he was done, Liddell was joined onstage for an executive Q&A by Ballmer, COO Kevin Turner, Online Services President Qi Lu and, finally, Chief Software Architect Ray Ozzie, who was apparently in the special guest star role for this year’s meeting.

It was emceed by investor relations guy Bill Koefoed, who I must admit, is not even close to as dull as he is when reading all that legal mumbo-jumbo at quarterly earnings call.

(Even to my assistant Ed–to whom Koefoed’s voice is like Valium, since I listen to those calls on a speakerphone at All Things Digital HQ, and it puts him into a deep stupor.)

There were various questions for the execs–all men, by the way, although who’s counting? Well, okay, me!–including:

* Whether Microsoft might make more acquisitions.

“We don’t acquire as a strategy,” said Ballmer flatly.

* Its relationship with Yahoo (YHOO) going forward and if it might lead to even closer ties.

“If there was an implicit question are we interested in a full acquisition, the answer is no. Yahoo is happy to be independent, we’re happy to be independent, we’re delighted with search partnership,” said Ballmer even more flatly.

There were also a whole bunch of financial questions, most on the far side of wonky. Ozzie spoke only briefly about big computing ideas, which is his job at the software giant.

And then it was over and he and the other big execs headed for cocktails with those gathered.

And, last I saw, Liddell was not wrestling any drinks from the attendees. Not yet, at least.

While Microsoft COO Kevin Turner did a kind of modified cheerleading act at Microsoft’s annual Financial Analyst Meeting, Entertainment and Devices President Robbie Bach played the teenage boy and Chief Research and Strategy Officer Craig Mundie the voice from the future.

During his presentation at the event at the Microsoft (MSFT) HQ in Redmond, Wash.–a series of presentations for Wall Street analysts and the media–Bach showed off the Xbox’s new Project Natal motion-sensing technology, which lets you play games and more without a controller.

Bach spazzed out nicely playing a game called Ricochet, with a storm of virtual red balls coming at him, although I was slightly worried the exertion might cause him to collapse on stage.

Turner was on before Bach, pretty much doing cleanup after CEO Steve Ballmer’s presentation, talking up all of Microsoft’s various businesses, while talking down its competitors’.

Said Turner, whose mantra was building market share for Microsoft: “Strong innovation, strong innovation investment, as well as strong operational excellence that we’re driving to compete and grow our market share.”

Strong, got it? (Frankly, I know companies always put their best foot forward at events like this–but after Ballmer’s own He-Man speech, BoomTown is a little worried that Scary Microsoft could be making a comeback, after a few post-antitrust years of Kinder-Gentler Microsoft.)

Bach, given his job, was a lot more entertaining and had more to show off, although he could not be as positive about the software giant’s mobile experience, given the juggernaut of the iPhone from Apple (AAPL).

“First of all, in Windows Mobile, as Steve pointed out, we had a challenging year from a share perspective,” said Bach. “Much tougher competition in the U.S. and certainly there is plenty of competition in this space.”

No kidding!

Natal is, of course, the pretty one for Bach’s division.

“It is about technology innovation and experience innovation. I think it will lead to a bigger and better business as well,” said Bach. “It is certainly an opportunity for us to build something new.”

Mundie also showed a lot of new futuristic stuff, which borrowed from the Natal technology, including a demo of a gesture-rich “office of the future” experience.

Said Mundie: “But as far as Microsoft, one of the greatest opportunities going forward is to realize there will be a successor to the desktop. It is the room. It is the fixed computing environment. The question is what can you do with computing when you have a much more robust man-machine interaction model and you don’t have to fold it in half and move it and run it on a battery.”

In the midst of it, though, he chit-chatted with a very scary “digital assistant” named DAG (I think it must stand for Digital Assistant Golem) on the screen, whose voice freaked me out in the exact way HAL from “2001: A Space Odyssey” always does.

After helping Mundie with a bunch of stuff, I am guessing DAG went off into the computer to work on a secret plan to kill off the human race.

Well, it was nice being here for this long on our little blue planet, Earth!

So, while we wait for DAG to destroy us, here’s the video demoing Natal that Bach showed to the audience, which is not new, but still pretty cool:

The fun never stops at Microsoft, it seems.

Well, not fun–more like a long march of khaki-clad Softies.

They will be on display bright and early this morning at the company’s annual Financial Analyst Meeting, a cavalcade of top execs at the tech giant blabbing away.

BoomTown will be there covering it in person, natch!

The Microsoft management smorgasbord includes:

CEO Steve Ballmer, COO Kevin Turner, Entertainment and Devices President Robbie Bach, Online Services President Qi Lu, Microsoft Business President Stephen Elop, Servers and Tools President Bob Muglia, Chief Research and Strategy Officer Craig Mundie, Chief Software Architect Ray Ozzie and CFO Chris Liddell.

I am betting that most of the focus at the gathering, which is being held at the worldwide HQ of Microsoft (MSFT) in Redmond, Wash., will likely be on two major events over the last week–its billion-dollar revenue miss in its fourth quarter and its just-born search and online advertising deal with Yahoo (YHOO).

The former, of course, was bad news for Microsoft, as it continues to signal weakness in its core operating system software and server businesses, due to lower demand for personal computers in the midst of the econalypse.

The latter was good news, of course, since Microsoft seemed to score a coup in nabbing the search technology business from Yahoo with no big upfront payments.

I have a lot of questions about both these issues, as will the crowd of reporters and Wall Street sharpies at the FAM, which is what they call the meeting here.

There could even be be plenty of answers, especially given that the entire leadership of Microsoft will be there.

Here is a link to a live Webcast of the FAM event, if you want to join the party too.