The 94-year-old investor got in and out of the movie business three times over the course of four decades, profiting handsomely as he repeatedly bought and sold Metro-Goldwyn-Mayer Inc. studio.

On the sidelines since 2005, Mr. Kerkorian is now on the hunt to buy a film studio, production company or other entertainment business, said Jay Rakow, an executive at Mr. Kerkorian’s investment vehicle, Tracinda Corp., during an interview.

Read the rest of this post on the original site »

BoomTown did an interview last night with outgoing RealNetworks (RNWK) CEO Rob Glaser after the announcement yesterday of his departure from the company he founded and led for 16 years.

That will be posted later today, but here is a profile of Glaser I wrote after spending time with him in Seattle, when I was covering the Internet for The Wall Street Journal.

It’s from Feb. 12, 1998–yes, that means Rob and I are genuine Web antiques–and focuses on Glaser’s decidedly complicated relationship with his former employer, Microsoft (MSFT).

As you will see, it comes from a much different era of the Internet, when Microsoft was much scarier, RealNetworks represented innovation and the medium was still in its infancy. My favorite line is a description of Glaser as “radiating so much intensity that his face resembles a clenched fist.”

Here it is:

Rob Glaser learned the software business as one of Bill Gates’s most aggressive proteges at Microsoft Corp. So he knows all too well the anguishing strategic decision that most software entrepreneurs inevitably confront: Go head-to-head against Mr. Gates and risk annihilation. Or cooperate with him–and risk annihilation.

Now an Internet entrepreneur himself, Mr. Glaser thinks he has another strategy: A delicate dance with Microsoft that combines a little bit of competition and a little bit of cooperation.

His newly public company, RealNetworks Inc., popularized the use of realtime audio and video on the Internet’s World Wide Web. It already has more than 18 million registered users of its free “streaming” software for receiving multimedia over the Net. It also has a rapidly growing business selling server software for transmitting audio and video to Website operators.

But it stands squarely in the path of the strategy that has drawn Microsoft into trouble with antitrust regulators: Emulating innovative products, integrating them into its operating systems and then giving them away free. RealNetworks’ daunting task is to prove it can do a better job of outmaneuvering Microsoft than Netscape Communications Inc., the browser pioneer whose market share and profitability have been devastated by Microsoft’s integration strategy.

Mr. Glaser insists he and the software giant can coexist. “I learned an amazing amount from Bill,” he says, speaking in staccato bursts and radiating so much intensity that his face resembles a clenched fist. “We knew we could either compete head-on like Netscape or do something a lot more interesting.”

His strategy is known internally as “coopetition.” Out of mistrust, Netscape two years ago rejected an unsolicited offer from Microsoft to become a partner and investor. But Mr. Glaser approached his former colleagues last summer seeking just such an alliance. In July, he sold a nonvoting 10% stake to Microsoft for $30 million, and licensed RealNetworks’ technology to the software giant for another $30 million. Microsoft also agreed to bundle RealNetworks’ software with Internet Explorer.

In making the deal, Mr. Glaser helped himself to Microsoft’s cash and prestige and calculated that Microsoft wouldn’t consider streaming technology to be as strategic to its future as the browser.

“What we were trying to do in the partnership is to set it up so that our success would not disadvantage their core business,” Mr. Glaser says. “Microsoft is a very paranoid company and so we have tried to create an environment where while they might be covetous of some of our success, analytically they would not fear it.”

The deal gave Mr. Gates the opportunity, if he so desired, to clone RealNetworks’ products during the period when they were licensed to Microsoft. “There’s no question they could use our own technology to become extremely vigorous competitors and try to put us out of business,” says James Breyer, a director and member of Accel Partners, a venture-capital firm that helped finance RealNetworks.

So Mr. Glaser needs to stay ahead of Microsoft by rapidly improving his software, accumulating enough customers to become the standard for sending audio and video over the Internet and diversifying into related businesses.

Last month, for example, he announced an agreement with one of Microsoft’s archrivals, Sun Microsystems Inc., to finetune his software to perform better on Sun’s popular Internet servers than on Windows-based servers.

“They are neither friend nor foe, but Microsoft is most certainly the environment we live in,” says Mr. Glaser, now 36 years old. “It’s how we work within that environment that will make all the difference.”

Mr. Glaser’s own personality seems suited to the relationship’s contradictions. He has been a committed liberal since his days at Yale University, where he wrote a column called “What’s Left” for the student newspaper. He initially named his company Progressive Networks to reflect his politics. And he donated 700,000 RealNetworks shares to causes related to freedom of speech and environmental issues after the public offering, and promises to contribute 5% of the company’s future profits as well.

But he became a notoriously hardcharging and sometimes arrogant manager after he joined Microsoft in 1983, at the age of 21. Some colleagues dubbed him a “screamer.” When deadlines approached for projects, several former colleagues at Microsoft say he became increasingly revved-up, downing one Diet Coke after another and erupting at even tiny mistakes. “My intensity sometimes manifested itself in less positive ways,” Mr. Glaser concedes.

“Like Microsoft, Rob was smart, young, perhaps a little hard to take, and convinced he was absolutely right about a lot of stuff,” recalls Mike Slade, a friend of Mr. Glaser’s at Microsoft who now runs an Internet publishing company, Starwave Corp. “But that was what was rewarded at the company and everything was going too fast there for a lot of management training.”

The pace did take its toll. Even though Mr. Glaser rose to become vice president of multimedia systems and one of Mr. Gates’s favorites, his last years at Microsoft were rocky. Some at the company point to an internal power struggle with Microsoft’s head of technology, Nathan Myhrvold. “They both wanted to be Bill’s boy genius and visionary for the company,” says a colleague. “Obviously, Nathan won.”

Mr. Glaser dismisses tales of infighting, blaming his departure on a diminishing feeling of “joy” in his work. “I began to think that Bill had the best job of all,” he says. In 1993, at the age of 31, he resigned, with about $15 million of stock in his pocket.

His retirement didn’t last long. Soon after, he saw a version of the Mosaic browser, the first graphical interface software for navigating the Web. He had an epiphany, he says, realizing that the Internet could eventually become a major purveyor of audio and video.

Mr. Glaser sank about $1 million of his own money into a start-up that would first produce software for compressing and transmitting sound. With additional funding from friends, such as Lotus founder Mitch Kapor, RealAudio 1.0 quickly made its debut in April 1995.

RealAudio was greeted with more than a little disdain from the Internet elite because it was a tinny and unsatisfying experience for most users. But it gave the Internet a voice, and Mr. Glaser kept plugging away, improving fidelity and striking deals with more content providers to use it on their Web sites. The hook: Free player software for consumers.

He is attempting to repeat the process with RealVideo. It currently provides small, jerky moving pictures but will, he believes, someday transform the Internet as data transmission speeds increase. In a recent demo of the player, Mr. Glaser selected a music video by the languid singer Jewel, he joked, “because she doesn’t move around too much.”

Meanwhile, Microsoft has been developing its own Media Player and NetShow streaming software, partly with technology acquired by purchasing VXtreme, a RealNetworks competitor.

The Microsoft products are now free. But the company may decide to charge for the latest version of NetShow coming out this year, which would be good for RealNetworks. Meanwhile, Microsoft will continue to bundle RealNetworks’ player software with the Microsoft browser, also good for RealNetworks. And the day after RealNetworks’ Sun deal, Microsoft announced an agreement to make its own Media Player compatible with RealNetworks’ server software, yet another positive development for RealNetworks.

“The user only wants it to work,” says Rich Tong, a Microsoft marketing vice president. “So it is good business to work with RealNetworks to set standards for compatibility and expand the market for all of us.”

Skeptics assert that RealNetworks has forged only a temporary truce with Microsoft. Like Netscape, it must continually confront the challenge of trying to make money on technology that Microsoft gives away. RealNetworks charges $29.95 for an enhanced version of the player it gives away free, and $695 and up for its most powerful server software.

Some large companies are snapping the products up. Mercedes Benz, Eastman Kodak and Lockheed Martin are buying RealNetworks’ latest software, RealSystem 5.0, to bring their internal networks to life. Boeing Co., for example, uses RealNetworks’ software to communicate with employees world-wide and conduct training sessions. A variety of media concerns such as Metro-Goldwyn-Mayer, the Public Broadcasting System, AOL, Fox News’s 24-hour newsfeed and Paramount Pictures use it as well.

Mr. Glaser recently cut a deal with Macromedia Inc., the largest provider of animation-editing software, to transmit animated material over the Internet. RealNetworks is also operating multimedia Web sites for other companies, and has a joint venture with MCI Communications Corp. to create a broadcast network on the Web.

All these initiatives are running up big bills. Earlier this month, RealNetworks reported that revenue more than doubled for 1997, to $32.7 million from $14 million the year before. But heavy research and development spending tripled losses to $11.2 million, or 40 cents a share, from $3.8 million, or 14 cents a share. The company’s high costs, plus the looming threat of Microsoft, have depressed the stock, which hovers at around $16 a share, only slightly above the $12.50 a share it opened at when it went public in November.

But Mr. Glaser exudes confidence. His intense personality seems calmer these days. Once divorced, he now has a steady girlfriend and is traveling more frequently, including a summer trip to New Zealand, Australia and French Polynesia, where he made the decision to take RealNetworks public. His 13.5 million shares are worth $218.5 million. And he thinks he has Microsoft figured out. “People in Silicon Valley see things unnecessarily in black and white: You either hate Microsoft or you are a vassal of them. I am saying there is a third way.”

7:40 p.m. A few more moments of guitar wankery from Slash and … well, I guess that’s it. Bach, not Gates, ends the keynote. “I’ll see you again next year,” he says as Gates waves briefly and leaves the stage. Must be rushing off to that billion-dollar-a-hand poker game at Caesars … And the lights go up. That is it. Quite a disappointment. Take away the celebrity appearances and what’s left is a well-rehearsed series of anticlimaxes and rehashes of demos past. A pity, really.
7:38 p.m.: Gates: She’s pretty good. But I’ve got my own ringer here … (Pleeeeease let it be Wayne Newton)
Nope. It’s Carrot Top. Kidding … It’s Slash it’s from Guns n’ Roses playing “Welcome to the Jungle” for real. He doesn’t miss a note either. Dry ice smoke and flashing lights.
7:36 p.m.: Bach challenges Gates to a Guitar Hero 3 match. Bach invites Guitar Hero champion Kelly Clarkson to play against Gates. … She plays Guns n’ Roses’ “Welcome to the Jungle” and doesn’t miss a note.
7:35 p.m.: Gates using the device to navigate video archives of keynotes past. Microsoft’s version of iTunes’ ‘Cover Flow.’ Messy.
7:33 p.m.: Gates uses the device to scan a photo of the Vegas skyline behind him. Clicks on the Venetian. The screen displays information for his keynote address. Pops another note indicating Ballmer’s playing nickel slots at another casino. Laughter.
7:31 p.m.: Bach brings Gates back onstage to discuss the future. … Gates takes the stage again with a handheld video recognition device. He points it at Bach and clicks. It recognizes Bach, displays his name onscreen, along with a note saying he owes Gates money.
7:29 p.m.: Fellow presenter uses Tellme to search out a movie theater, browse movie listings, purchase tickets for a movie and then send them to a friend. Pretty slick, especially given the size of the mobile advertising market.
7:27 p.m.: On to Windows Mobile and Microsoft’s Tellme service.
7:26 p.m.: Bach and fellow presenter now demoing “Sync”–an in-car voice-command technology that enables Zune owners to sync their Zunes to their car stereos and then navigate their music libraries with voice commands.
7:24 p.m.: Bach talks about Zune Social as a service that drives music transactions from discovery to purchase. Find a song you like on a friend’s page, click on it and purchase from Zune Marketplace. Again, haven’t we heard all this before?
7:22 p.m.: Listening habits are tracked via “cards.” Bands can create their own Zune Social pages as well. Essentially, MySpace for music.
7:20 p.m.: Zune Social apparently tracks your listening habits in real-time. It’s all about “people-powered music discovery.”
7:18 p.m.: Bach talking up the Zune now. … Demoing Zune Social.
7:17 p.m.: British Telecom is to begin selling Xbox 360s as Media-Room based set-top boxes. Price of relocation to UK not included with activation fee …
7:15 p.m.: In addition to this, MGM will also be adding its film library to Xbox Live. End result: Twice as many hours of on-demand programming as any cable provider out there.
7:14 p.m.: ABC and Disney will be bringing their programming to Xbox Live.
7:13 p.m.: Gates brings Robbie Bach onstage to talk about Xbox 360.
7:11 p.m.: Using Microsoft Silverlight technology, NBC and MSN will put some 3,000 hours of high-definition footage of the Beijing Olympics online. Wow: 3,000 hours of video. What a massive effort. First of its kind.
7:10 p.m.: Gates commenting on broadcast television: “It simply isn’t as fulfilling an experience as online video.”
Here comes another video segment. … Bob Costas pitching.
7:09 p.m.: Moving on to Silverlight. Gates says NBC has chosen Microsoft as its exclusive online video partner for the 2008 Olympics.
7:08 p.m.: He finishes up the design, lays his phone down on the screen and it automatically emails his design to friends for review.
7:07 p.m.: Gates, thankfully, back onstage for another demo. Wait, what’s this. Another Surface demo?! Didn’t we see this last year? Yes, we did–but given by Steve Ballmer, not Gates. Gates using Microsoft’s Surface multitouch computer to demo a snowboard-design service.
7:05 p.m.: The big achievement being touted here seems to be the connection between these services and the single log-on. As Dan Aykroyd might say: Isn’t that AMAZING?
7:04 p.m.: Windows Live Photo Gallery … in browser photo editing, sharing (via email or Flickr) and exporting to blog. Bor-ing. They would have been better off playing the farewell video again. That ‘Bib Pimpin’ segment was comedy gold.
7:02 p.m.: First up: Windows Live Calendar now with … wait for it … multiple calendar overlays (YAY! sigh…)
But wait, there’s more … Windows Live Events, an invitation/event organizing service. They really should have called it Windows Live eVites …)
7 p.m.: Gates brings Mika Krammer, a director of product management for Windows, onstage to demo some new features of Windows Live.
6:59 p.m.: And here comes the product line-up overview: Windows Vista, Windows Live, Windows Mobile ….
6:58 p.m.: A key building block of the second digital decade, the centerpiece building block will be. … (drum roll, please) … Microsoft Windows!
6:56 p.m.: “Devices will know our context and location,” Gates continues. There will be new modes of interaction and natural interfaces. “We’re very interested in simpler ways of navigating our technology.” If he were going to announce Microsoft Bob 2.0, now would be the perfect time to do it. Nope. Ah, well. “The software industry will build these new modes of interaction–touch, voice, gesture–into the software.”
6:55 p.m.: And now for a few predictions. “In the future Microsoft products and services will run on the desktop and in the cloud,” he says. Would that be the cloud with all the Google AdWords all over it? “And 3-D environments will exist for Web experiences, high-quality video and audio in a pervasive way.” Make way for Third Life …
“Devices and services will be connected.” As an example, Gates talks about photos automatically being uploaded to digital-memory application.
6:54 p.m.: Gates back onstage discussing the coming transition in leadership at Microsoft when he will step down from his day-to-day role as the company’s chairman. He says Microsoft is aligned well for success with Steve Ballmer, Ray Ozzie and others.
Moving on … “The second digital decade heralds the following: high definition experience is everywhere.”
6:52 p.m.: Video ends to thunderous applause. UPDATE: Here’s the video:

6:50 p.m.: Footage of Gates cleaning out desk, taking box of office supplies to his Ford Focus. Ford Focus–now that’s funny.
Cut to Peter Jennings: “Let’s face it, all of us here at NBC News will miss reporting on this brilliant, powerful, sexy man who just doesn’t like to pay more than $7 on a haircut.”
6:49 p.m.: Gates calls Jon Stewart and asks about a co-anchor job. Stewart turns him down.
Gates calls Hillary Clinton. She turns him down as a running mate, so he calls Obama:
Gates: It’s Bill.
Obama: Bill Shatner?
Gates: No, Bill!
Obama: Bill Clinton?
6:48 p.m.: Steven Spielberg reviews Gates’s audition reel (“X-Men” and “Matrix” re-enactments; Gates in Wolverine get-up, Gates and Ballmer in Matrix-style black trench coats) and denies him a part in his next film.
6:47 p.m.: Footage of Gates calling Bono in the middle of a U2 concert. Gates plays guitar riff on “Guitar Hero” for Bono. Bono tells him there’s no place for him in U2. Which is OK, I’m sure, since there’s certainly no place for Bono at Microsoft.
6:46 p.m.: My God … Gates in recording studio with Jay-Z… Holy … Gates singing “Big Pimpin’.” Wild laughter and applause. “It was great,” Jay-Z tells Gates, before turning to the camera and muttering, “not so much.”
6:45 p.m.: Various Microsoft execs talking about Gates. Clip of Gates in office playing with action figures: “Never doubt the power of software.” Laughter.
Quickly followed by Gates in gym working out with Matthew McConaughey, who doesn’t really strike you as a Windows user.
6:44 p.m.: “This is my last keynote. Come July, it will be the first time I won’t be working at Microsoft since I was 17.” And here comes the inevitable farewell video ….
6:42 p.m.: He mentions the progression of digital entertainment–music, movies, photos. The trend is clear: all media and entertainment will be software driven in the second digital decade. And in the third, it will all be driven by Microsoft Windows! Muahahahahaha. Kidding … Moving on … “I’ll soon step down as chairman.”
6:40 p.m.: Gates finally takes the stage. He recalls his first keynote in 1994, a time when Windows ’95 was first coming together. “It was the beginning of the first digital decade.” Ah yes, “The Digital Decade.”
6:39 p.m.: Here comes another silly video, this one set to “Believe in Magic,” featuring people from all walks of life extraordinarily happy to be using Microsoft products. They look like they’re all on Ecstasy. And it’s probably safe to say that nobody has ever looked like that while using a Microsoft product.
6:35 p.m.: Shapiro says Gates has given 10 CES keynotes, eight consecutively. He’s spoken at CES 11 times. Guess he must be the Guinness World Record holder. How ’bout that, huh?
6:33 p.m.: And here comes Gates. Wait–that’s not Gates. It’s Consumer Electronics Association President Gary Shapiro. OH RAPTURE! Disappointed applause. “In my opinion these are the best four days of the year,” says Shapiro. (Tell that to Steve Jobs next week.)
6:30 p.m.: Silly CES promo video… Correction: advertisement.
6:29 p.m.: Getting started right on time. Guess Jim Allchin and the Vista development team didn’t do Gates’s makeup this time around. Lights dim….
6:25 p.m.: In a few moments, Bill Gates, the Frank Sinatra of the Dat(a) Pack (Steve Jobs presumably in the Dean Martin role), will deliver his 11th Consumer Electronics Show keynote–and by many projections his last.
6:00 p.m.: The ballroom of the Venetian Resort Hotel Casino is pretty much packed, and like most things in Las Vegas it’s BIG. But it has to be the worst pre-keynote music EVER: from 1982 video game soundtrack to passed-out-after-the-rave techno to European disco to new wave. Really covering all the genres. At this rate, Bill Gates could take the stage to the theme from “The Dukes of Hazzard” or the “Annie” soundtrack.

7:40 p.m. A few more moments of guitar wankery from Slash and … well, I guess that’s it. Bach, not Gates, ends the keynote. “I’ll see you again next year,” he says as Gates waves briefly and leaves the stage. Must be rushing off to that billion-dollar-a-hand poker game at Caesars … And the lights go up. That is it. Quite a disappointment. Take away the celebrity appearances and what’s left is a well-rehearsed series of anticlimaxes and rehashes of demos past. A pity, really.
7:38 p.m.: Gates: She’s pretty good. But I’ve got my own ringer here … (Pleeeeease let it be Wayne Newton)
Nope. It’s Carrot Top. Kidding … It’s Slash it’s from Guns n’ Roses playing “Welcome to the Jungle” for real. He doesn’t miss a note either. Dry ice smoke and flashing lights.
7:36 p.m.: Bach challenges Gates to a Guitar Hero 3 match. Bach invites Guitar Hero champion Kelly Clarkson to play against Gates. … She plays Guns n’ Roses’ “Welcome to the Jungle” and doesn’t miss a note.
7:35 p.m.: Gates using the device to navigate video archives of keynotes past. Microsoft’s version of iTunes’ ‘Cover Flow.’ Messy.
7:33 p.m.: Gates uses the device to scan a photo of the Vegas skyline behind him. Clicks on the Venetian. The screen displays information for his keynote address. Pops another note indicating Ballmer’s playing nickel slots at another casino. Laughter.
7:31 p.m.: Bach brings Gates back onstage to discuss the future. … Gates takes the stage again with a handheld video recognition device. He points it at Bach and clicks. It recognizes Bach, displays his name onscreen, along with a note saying he owes Gates money.
7:29 p.m.: Fellow presenter uses Tellme to search out a movie theater, browse movie listings, purchase tickets for a movie and then send them to a friend. Pretty slick, especially given the size of the mobile advertising market.
7:27 p.m.: On to Windows Mobile and Microsoft’s Tellme service.
7:26 p.m.: Bach and fellow presenter now demoing “Sync”–an in-car voice-command technology that enables Zune owners to sync their Zunes to their car stereos and then navigate their music libraries with voice commands.
7:24 p.m.: Bach talks about Zune Social as a service that drives music transactions from discovery to purchase. Find a song you like on a friend’s page, click on it and purchase from Zune Marketplace. Again, haven’t we heard all this before?
7:22 p.m.: Listening habits are tracked via “cards.” Bands can create their own Zune Social pages as well. Essentially, MySpace for music.
7:20 p.m.: Zune Social apparently tracks your listening habits in real-time. It’s all about “people-powered music discovery.”
7:18 p.m.: Bach talking up the Zune now. … Demoing Zune Social.
7:17 p.m.: British Telecom is to begin selling Xbox 360s as Media-Room based set-top boxes. Price of relocation to UK not included with activation fee …
7:15 p.m.: In addition to this, MGM will also be adding its film library to Xbox Live. End result: Twice as many hours of on-demand programming as any cable provider out there.
7:14 p.m.: ABC and Disney will be bringing their programming to Xbox Live.
7:13 p.m.: Gates brings Robbie Bach onstage to talk about Xbox 360.
7:11 p.m.: Using Microsoft Silverlight technology, NBC and MSN will put some 3,000 hours of high-definition footage of the Beijing Olympics online. Wow: 3,000 hours of video. What a massive effort. First of its kind.
7:10 p.m.: Gates commenting on broadcast television: “It simply isn’t as fulfilling an experience as online video.”
Here comes another video segment. … Bob Costas pitching.
7:09 p.m.: Moving on to Silverlight. Gates says NBC has chosen Microsoft as its exclusive online video partner for the 2008 Olympics.
7:08 p.m.: He finishes up the design, lays his phone down on the screen and it automatically emails his design to friends for review.
7:07 p.m.: Gates, thankfully, back onstage for another demo. Wait, what’s this. Another Surface demo?! Didn’t we see this last year? Yes, we did–but given by Steve Ballmer, not Gates. Gates using Microsoft’s Surface multitouch computer to demo a snowboard-design service.
7:05 p.m.: The big achievement being touted here seems to be the connection between these services and the single log-on. As Dan Aykroyd might say: Isn’t that AMAZING?
7:04 p.m.: Windows Live Photo Gallery … in browser photo editing, sharing (via email or Flickr) and exporting to blog. Bor-ing. They would have been better off playing the farewell video again. That ‘Bib Pimpin’ segment was comedy gold.
7:02 p.m.: First up: Windows Live Calendar now with … wait for it … multiple calendar overlays (YAY! sigh…)
But wait, there’s more … Windows Live Events, an invitation/event organizing service. They really should have called it Windows Live eVites …)
7 p.m.: Gates brings Mika Krammer, a director of product management for Windows, onstage to demo some new features of Windows Live.
6:59 p.m.: And here comes the product line-up overview: Windows Vista, Windows Live, Windows Mobile ….
6:58 p.m.: A key building block of the second digital decade, the centerpiece building block will be. … (drum roll, please) … Microsoft Windows!
6:56 p.m.: “Devices will know our context and location,” Gates continues. There will be new modes of interaction and natural interfaces. “We’re very interested in simpler ways of navigating our technology.” If he were going to announce Microsoft Bob 2.0, now would be the perfect time to do it. Nope. Ah, well. “The software industry will build these new modes of interaction–touch, voice, gesture–into the software.”
6:55 p.m.: And now for a few predictions. “In the future Microsoft products and services will run on the desktop and in the cloud,” he says. Would that be the cloud with all the Google AdWords all over it? “And 3-D environments will exist for Web experiences, high-quality video and audio in a pervasive way.” Make way for Third Life …
“Devices and services will be connected.” As an example, Gates talks about photos automatically being uploaded to digital-memory application.
6:54 p.m.: Gates back onstage discussing the coming transition in leadership at Microsoft when he will step down from his day-to-day role as the company’s chairman. He says Microsoft is aligned well for success with Steve Ballmer, Ray Ozzie and others.
Moving on … “The second digital decade heralds the following: high definition experience is everywhere.”
6:52 p.m.: Video ends to thunderous applause. UPDATE: Here’s the video:

6:50 p.m.: Footage of Gates cleaning out desk, taking box of office supplies to his Ford Focus. Ford Focus–now that’s funny.
Cut to Peter Jennings: “Let’s face it, all of us here at NBC News will miss reporting on this brilliant, powerful, sexy man who just doesn’t like to pay more than $7 on a haircut.”
6:49 p.m.: Gates calls Jon Stewart and asks about a co-anchor job. Stewart turns him down.
Gates calls Hillary Clinton. She turns him down as a running mate, so he calls Obama:
Gates: It’s Bill.
Obama: Bill Shatner?
Gates: No, Bill!
Obama: Bill Clinton?
6:48 p.m.: Steven Spielberg reviews Gates’s audition reel (“X-Men” and “Matrix” re-enactments; Gates in Wolverine get-up, Gates and Ballmer in Matrix-style black trench coats) and denies him a part in his next film.
6:47 p.m.: Footage of Gates calling Bono in the middle of a U2 concert. Gates plays guitar riff on “Guitar Hero” for Bono. Bono tells him there’s no place for him in U2. Which is OK, I’m sure, since there’s certainly no place for Bono at Microsoft.
6:46 p.m.: My God … Gates in recording studio with Jay-Z… Holy … Gates singing “Big Pimpin’.” Wild laughter and applause. “It was great,” Jay-Z tells Gates, before turning to the camera and muttering, “not so much.”
6:45 p.m.: Various Microsoft execs talking about Gates. Clip of Gates in office playing with action figures: “Never doubt the power of software.” Laughter.
Quickly followed by Gates in gym working out with Matthew McConaughey, who doesn’t really strike you as a Windows user.
6:44 p.m.: “This is my last keynote. Come July, it will be the first time I won’t be working at Microsoft since I was 17.” And here comes the inevitable farewell video ….
6:42 p.m.: He mentions the progression of digital entertainment–music, movies, photos. The trend is clear: all media and entertainment will be software driven in the second digital decade. And in the third, it will all be driven by Microsoft Windows! Muahahahahaha. Kidding … Moving on … “I’ll soon step down as chairman.”
6:40 p.m.: Gates finally takes the stage. He recalls his first keynote in 1994, a time when Windows ’95 was first coming together. “It was the beginning of the first digital decade.” Ah yes, “The Digital Decade.”
6:39 p.m.: Here comes another silly video, this one set to “Believe in Magic,” featuring people from all walks of life extraordinarily happy to be using Microsoft products. They look like they’re all on Ecstasy. And it’s probably safe to say that nobody has ever looked like that while using a Microsoft product.
6:35 p.m.: Shapiro says Gates has given 10 CES keynotes, eight consecutively. He’s spoken at CES 11 times. Guess he must be the Guinness World Record holder. How ’bout that, huh?
6:33 p.m.: And here comes Gates. Wait–that’s not Gates. It’s Consumer Electronics Association President Gary Shapiro. OH RAPTURE! Disappointed applause. “In my opinion these are the best four days of the year,” says Shapiro. (Tell that to Steve Jobs next week.)
6:30 p.m.: Silly CES promo video… Correction: advertisement.
6:29 p.m.: Getting started right on time. Guess Jim Allchin and the Vista development team didn’t do Gates’s makeup this time around. Lights dim….
6:25 p.m.: In a few moments, Bill Gates, the Frank Sinatra of the Dat(a) Pack (Steve Jobs presumably in the Dean Martin role), will deliver his 11th Consumer Electronics Show keynote–and by many projections his last.
6:00 p.m.: The ballroom of the Venetian Resort Hotel Casino is pretty much packed, and like most things in Las Vegas it’s BIG. But it has to be the worst pre-keynote music EVER: from 1982 video game soundtrack to passed-out-after-the-rave techno to European disco to new wave. Really covering all the genres. At this rate, Bill Gates could take the stage to the theme from “The Dukes of Hazzard” or the “Annie” soundtrack.

From top to bottom, Blockbuster is deliberately and willfully infringing on our patented methods. Netflix invented a 100 percent better mousetrap that Blockbuster copied.
- Netflix spokesperson Steve Swasey, April 5, 2006

Apparently, Blockbuster isn’t as hopelessly tethered to its VHS rental-business past as you might think. Yesterday, the video-rental retailer acquired studio-owned movie download service Movielink and with it a potentially significant foothold in the video-on-demand market. Terms of the deal were not disclosed, but early this year when rumors of an acquisition first began to circulate, analysts had estimated that Blockbuster might pay as much as $50 million.

Founded in 2002, Movielink is backed by Paramount Pictures, Sony Pictures, Metro-Goldwyn-Mayer, Universal Studios and Warner Bros. Studios. But while its impressive catalog makes it one of the Web’s largest digital-movie libraries, the service hasn’t caught on because of its strict digital-rights management software and prices (roughly the same as a typical DVD). Still, it’s likely a good acquisition for Blockbuster, whose market value has declined to just over $800 million from $8.4 billion, largely because of its failure to buy Netflix when it had the chance.

Blockbuster chair and CEO Jim Keyes called the deal the next “logical” step in the company’s transformation. Presumably, that means the next phase in Blockbuster’s re-creation of the Netflix business model, which the video-rental chain has been diligently following for the past few years. Netflix, of course, is spending some $40 million this year on its own VOD service, which is already up and running.