The e-commerce giant (a term typically reserved for Amazon in these woods) is one of the larger examples companies from the Bay Area that are setting up shop here and looking to soak up some of the Northwest’s rich engineering talent.

Other companies with satellite offices in the Seattle area include Google, Facebook, Zynga and Salesforce.

“I’m surprised I ended up at eBay, but the story is compelling,” said Ken Moss, who was hired in November to be eBay’s VP of managed marketplaces technology; Moss is GM of the Redmond office.

A long-time Microsoft employee whose claim to fame includes inventing the Pivot table in Excel, Moss more recently co-founded CrowdEye, a start-up focused on search technology and later on stock market prediction.

He said eBay’s dedication to the region is one of the biggest selling points for recruitment.

Most of the 75 employees that currently work there were hired over the past few months, and a small team has been here for seven years. Among the newbies I met were a number of Microsoft veterans who had been there for 12 to 15 years.

Moss says he will report directly to eBay’s CTO Mark Carges, which is “a signal to the whole company that diversified development is for real.”

“We are first-class citizens,” Moss said, referring to sometimes strained relationship between remote workers and a company’s headquarters.

Eric Brill, VP of eBay’s research labs, is also based in the Redmond office, and has been working part-time there since joining the company in 2009.

Moss said eBay will be looking to hire a range of technologists, from college graduates to senior leaders, including developers, testers, researchers, data miners and other positions.

While I was at the office on Tuesday, the mountains were peeking out from the clouds and were easy to spot from the floor-to-ceiling windows on the fourth floor. It was easy enough for everyone to have a window seat in the open-floor plan.

Although the employees just moved in on Monday, a sign outside the building already announced eBay’s presence. Inside, workers were busy putting the final touches on the space to make it feel like eBay. Primary colors of red, blue, yellow and green highlighted the office walls; with a bit of Seattle flair, conference rooms were named after Northwest tribes such as Puyallup and Quinault (and other names that might be difficult for San Jose-based employees to pronounce).

But missing were some of the perks that some recruits expect these day — no shuttles to and from work or fancy cafeterias, for instance. 

In fact, eBay has a long way to go to compare with what Google has done here. Since entering the market seven years ago, Google has hired more than 900 employees, spread across two locations, a spokesperson confirmed.

One office is in Seattle’s Fremont neighborhood; the other is on the Eastside.

The two offices are geographically divided by Lake Washington, which can be crossed by one of two floating bridges — or by boat, if you are crafty enough. The traffic bottlenecks make for a horrendously notorious commute, so having two locations that straddle both sides is a huge perk — like having offices in both San Francisco and San Jose.

Because of Google’s size here, many of its perks are similar to its Mountain View headquarters, including free meals prepared by chefs, frozen-yogurt bars and other, mostly food-based, luxuries.

In eBay’s case, the new digs are located deep on the Eastside, a couple of miles past Microsoft in Redmond, and roughly 15 miles from Jeff Bezos’s empire in downtown Seattle. Recently, Amazon relocated its headquarters to a brand-new campus in South Lake Union, a neighborhood being revitalized by former Microsoft executive Paul Allen.

Other outside companies that have also established sizable tech centers here include Facebook and Zynga. A couple others have gained offices through acquisitions. Electronic Arts, for instance, now has a large office here, after acquiring PopCap; EMC now has big expansion plans here, after purchasing Isilon.

And Geekwire, a Seattle-based technology blog, is good at keeping an ongoing tally, including recent moves into the area by Jawbone and SweetLabs, a San Diego-based start-up, based by Intel Capital and Google Ventures.

Two years ago, Facebook opened an office in the heart of downtown Seattle. It plans to move soon to a 27,000-square-foot space that will have room for about 135 employees. The 70 or so engineers in the office today have worked on projects such as video calling, the Facebook iPad app and other big issues, such as security.

Last April, social game maker Zynga opened an office in Seattle’s historic Pioneer Square neighborhood, hoping to absorb some of the game talent here, spawned from Xbox and Nintendo, and cloud-computing knowledge from Amazon. It has 50 employees today, but declined to say how many it planned to hire in the near future.

As with most of these companies, eBay believes it can find a diversity of talent here that can’t always be easy to hire in the Bay Area.

As a Seattle native, and having covered tech here for the past 12 years, including an eight-year stint at the Seattle Times, I might not be the most unbiased on the subject. But I’ve seen first-hand the breadth of talent here, from Microsoft, Amazon, Expedia, T-Mobile and many others, including a strong start-up pool.

Despite that, the local tech community often suffers from an inferiority complex when it compares itself with the Bay Area, which is much larger. Still, it seems that Silicon Valley companies are finding a number of excuses to travel north to drink from the area’s plentiful tech waters.

As expected, the European Commission approved Microsoft’s $8.5 billion acquisition of Skype late last week.

Next, the deal for the popular Internet communications company — which had previously been cleared by U.S. regulators — is likely to officially close later this week (paperwork!), said several sources close to the situation.

Now, of course, comes the hard part — which is whether Microsoft can successfully integrate the more nimble Skype into the belly of the software beast and allow it to thrive.

Some key questions:

How smoothly can Microsoft integrate Skype into its existing products, such as its unified communications platform, Outlook mail and Hotmail, Office, Messenger and Xbox Live? And, perhaps most of all, Windows Phone devices?

That said, will Skype also get to do what it needs for its own success beyond Microsoft? That includes working with mobile rivals Apple and Google, who now dominate the smartphone market, as well as many others. It has already managed to buy GroupMe group messaging start-up for $85 million, just months after its own acquisition in May.

And can the division — which will be led by Tony Bates, Skype’s CEO and now a Microsoft president — operate successfully located mostly away from the power center of Redmond, Wash.? Skype has a substantial office in Silicon Valley, as well as key engineering units in Estonia and Stockholm.

In that vein, will Microsoft be able to hold on to new talent like Bates and Skype’s geek squad, all of whom have substantial choices elsewhere? Like a lot of large tech companies, Microsoft is not known for being able to hold on to those who come in from the outside, in large part due to its insular culture of longtime execs.

In other words, how big a welcome will Microsoft’s other powerful presidents — such as Windows division head Steven Sinofsky — give Bates and company?

With the rise of the smartphone and the emergence of the tablet, that threat has become real. Now, as the pressure mounts, Microsoft is due to make its case for why Windows can not only hang on to the desktop, but finally deliver on the tablet promises it has been making for a decade.

At a developer conference in Anaheim, Calif., the company is expected to offer a great deal more detail on Windows 8 — the next version of the operating system first shown at our D9 event in June. Windows 8 boasts a touchy-feely new interface, literally, along with a whole new means for writing Windows apps. Also, in a shift, Windows will run on the same kinds of ARM chips that power many of today’s smartphones and tablets.

With the changes, Windows chief Steven Sinofsky says Microsoft is in a position to deliver a “no compromise” operating system that is equally at home on small tablets and powerful desktops.

Some are hoping that Microsoft would go a step further and announce some sort of plan to allow Windows Phone apps to run on Windows 8. That, however, seems unlikely. While Windows and Windows Phone may someday converge, for now the two remain on different architectures.

Whatever Microsoft has to say, AllThingsD will be on hand to make sure our readers don’t miss a beat.

Redmond will also be talking about its bottom line, holding a financial analysts’ meeting on Wednesday. And since it is bringing out its big guns, AllThingsD is doing the same, with Kara Swisher joining me in Anaheim to bring her wit and wisdom to that part.

Microsoft had a solid fourth quarter, which is why the conference call with Wall Street analysts should be relatively short and sweet.

Or sweet, at least.

Microsoft reported beat expectations on profits that rose 30 percent, as well as on revenue. Of particular note were its Office, Entertainment and Devices and Servers and Tools units. Even the revenue at its perpetually money-sucking Online Services division was up 17 percent.

(You can see Microsoft’s charts and other data here, if you really want more.)

Here’s a liveblog of the call:

2:31 pm PT: Well, Microsoft investor relations dude-in-chief Bill Koefoed sounds unusually jaunty in his greeting.

And why not? The results are good for Microsoft, even a little giddy, with a lot of impressive numbers and solid launches of several products, from Xbox Kinect to Office 365 to Bing, the very pricey but pretty search service.

Next up is CFO Peter Klein, who also sounds like this particular call is a relief.

He talks about the results a bit, most of which are up.

“In summary, we are pleased,” says Klein about the quarter and the year. He also notes that he is “excited.”

It’s party time in Redmond!

2:38 pm: Peppy Bill is back, going through the numbers. Solid!

Klein then moves onto the future and he remains “excited.”

Now, it is onto Q&A from the analysts.

This is where I zone out a little and start to wonder if a doughnut is a wise choice for an afternoon tasty treat.

That would make me “excited.”

Lots of congrats, which only makes me hungrier. One analyst asks why it was so much stronger than expected.

Klein: The economy has improved, businesses are expanding, peeps love them some cloud.

There is a question about how the troubled Yahoo search partnership is going. Klein promises some improvement by the end of the year.

Still, bummer!

But it is quickly back to happy, with a question about the strength of Xbox and its subscribers.

“It’s fantastic,” says Klein.

Like I said, sweeeeeeet.

You’d think there would be a party in Redmond, Wash., today, as software giant Microsoft soundly beat Wall Street expectations in its third-quarter earnings released earlier today.

Microsoft said it had revenue of $16.43 billion for the quarter ended March 31, 2011, which was up 13 percent from a year ago. Net income was $5.23 billion, or 61 cents per share, a rise of 31 percent and 36 percent, respectively.

The surge was led by sales of Office, Kinect and Xbox and a stronger economy.

But there are shadows, too, as results were dragged down by weaker revenues for its flagship Windows unit.

The report comes as Microsoft’s stock continues to lag, declining 14 percent for the year.

Buzz kill!

BoomTown livedblogged the call for Wall Street analysts:

2:30 pm PT: Peter Klein, Microsoft’s CFO, who sounds super peppy, outlined the strong quarter, especially for its Office products.

He also mentioned some glitches, such as Microsoft’s still-struggling efforts to increase revenue per search (RPS) in its longtime search and online advertising partnership with Yahoo and the slower growth of the PC sector upon which the software giant’s Windows relies.

PC should stand for “possibly crappy,” but good-boy Klein did not say so.

Investor relations dude Bill Koefoed also read through the news, sounding at times like a sports announcer on a cable television network.

“Quuuuaaadrupled…,” he intoned about one part of Microsoft’s business.

This all went on for a while, since Microsoft has a lot of divisions. Servers & Tools. Online Services. Entertainment and Devices. Fashion & Cute Tops.

Okay, not that one, but a girl can dream.

It was all fun and games until Koefoed got to the Yahoo problem, which Yahoo CEO Carol Bartz had used as a cudgel in her earnings report recently.

Yes, it is a bummer. But soon it was back to the happy land of Xbox!

Klein said he was pleased with the results in a jaunty manner, which made me desperately wish Microsoft CEO Steve Ballmer led the call.

Because he’s always one obnoxious query away from a volcanic popping off.

Which is why I love those Yahoo calls and Bartz.

Buzz kill!

2:54 pm PT: That was fast–the call was quickly into questions.

The first is about COGS–cost of goods sold–and how it impacts gross margins.

Klein said the expenses were volume driven. I’d explain, but then I would fall asleep.

The next question was about stock buybacks.

That might get the stock up. Yeah, said Klein, they’ll keep doing that–not that it has helped much on the share price front.

More and more questions, about the PC market, the issues at Yahoo (let’s get that RPS up!), the Windows Phone 7 business.

I’ll be honest, I was a bit bored and started reading a riveting Business Insider interview with TechCrunch’s Michael Arrington on his myriad conflicts of interest related to his tech investing while also blogging as a news guy.

Whatever you think about him, that dude is good copy.

Wait, back to growth rates for Office!

It’s going great, said Klein (hey, maybe Arrington will invest!).

The call wraps up on news of an upcoming investor conference, being held near Disney World.

Oooh, party time!

Software giant Microsoft soundly beat Wall Street expectations in its third-quarter earnings released after the market closed today.

Microsoft said it had revenue of $16.43 billion for the quarter ended Mar. 31, 2011, which was up 13 percent from a year ago. Net income was $5.23 billion, or 61 cents per share, a rise of 31 percent and 36 percent, respectively.

Investors were expecting the Redmond, Wash. tech company to have profits of 56 cents per share, up 45 cents per share in the same quarter last year. Revenue was expected to come in at $16.2 billion.

As usual, Microsoft beating of expectations still has not helped its lackluster stock, which is down almost 14 percent year over year.

Its shares are currently down more than two percent in after-hours trading, to $26.09.

That’s due to worries about PC market growth, in the wake of an explosion of tablet and smartphone devices from competitors such as Apple and Google.

Most of Microsoft’s divisions were up in terms of revenue, especially its Xbox, Kinect and Office businesses. That offsetted slowing PC growth, Microsoft said, as well as a 4.5 percent drop in revenue in its flagship Windows and Windows Live division.

BoomTown will be liveblogging the earnings call at 2:30 pm PT.

Until then, here is the official press release:

letterheadFY11Q3 –

After it struck its online advertising and search partnership with Yahoo, Microsoft tapped longtime Internet exec Brett Wayn (pictured here) to work with Greg Nelson during the integration.

Well, Wayn must have liked what he saw at the Silicon Valley Internet giant, since he is bouncing there from his job at the Redmond, Wash. software giant to help run local efforts at Yahoo.

[UPDATING local roles at Yahoo.]

Wayn will be working for Chief Product Officer Blake Irving and will be responsible for product management of Yahoo’s local “horizontal.”

He will work closely with whoever Yahoo finds as a replacement for Matt Idema, a longtime Yahoo exec who shuttled over to Facebook as a director of business operations, working on the local arena.

Luke Beatty, who heads up Yahoo’s Americas region community and local businesses, including Flickr, Groups, Answers and hundreds of local sites, is doing Idema’s job for now within Americas head Ross Levinsohn’s unit.

Local is a hugely hot space right now, with a spate of Web focus from giants like Google and Facebook to powerful start-ups such as Foursquare and Groupon.

Wayn has more recently been working on international for Microsoft’s MSN portal. The Australian native has also worked at AOL and, interestingly, has an actual medical degree.

In other words: Paging Dr. Local, stat!

Timing is everything and, sometimes, very awkward.

Today at its Redmond, Wash., campus, Microsoft is hosting a splashy online “marketing leadership summit” titled “Imagine 2011″–a gathering of top marketing execs from across the globe, most of whom are advertising clients of its online division.

Also today: Its longtime head of global marketing, Mich Mathews, announced her departure–to the surprise of many Microsoft execs here, in fact–via a report in Ad Age.

In the article, she said she had told execs at Microsoft just last night.

Mathews, who is probably Microsoft’s top woman executive, has been at the software giant for a dog’s age–22 years. (BoomTown met the sharp-witted and often pointed exec in the early 1990s, when she was in charge of the PR operations for the company.)

As SVP of Microsoft’s Central Marketing Group, Mathews oversees a $1 billion budget for Microsoft products such as Windows, Xbox , Window Phone 7 and its Bing search service.

While Microsoft will be conducting a global search for a replacement, several sources said the most obvious internal candidate for the job is Yusuf Mehdi, who is SVP for its Online Audience Business.

He leads global product management, strategic partnerships, business development and U.S. marketing execution for the unit.

Another strong internal possibility: Chris Capossela, who just left his job as SVP of the Microsoft Business division for unspecified duties around social initiatives. He had a similar job to Mehdi’s, with key marketing duties.

Attendees at the Imagine event were buzzing about the Mathews news, taking some focus off the program, which included an opening speech by CEO Steve Ballmer.

Ballmer did not mention Mathews onstage, which was a by-the-book overview of its online ad offerings.

Another sticky situation for Microsoft: The Imagine event was organized by another top woman exec at Microsoft, global ad sales head Carolyn Everson.

But, she left the company in mid-February after only six months, for essentially the same job at Microsoft partner Facebook.

Since then Microsoft and Facebook have been wrangling over the talent raid, including Microsoft even considering legal action to block the move.

(In yet another unrelated embarrassing situation–here’s an excerpt from a memoir by Microsoft co-founder Paul Allen, in which he alleges co-founder Bill Gates tried to shanghai him out of shares when he was sick with cancer.)

Like I said: Awkward!

Microsoft–furious over a recent talent grab of its top advertising exec by Facebook–has been considering a wide range of options, including legal action to block the move, according to sources close to the situation.

Lawyer at both companies have been in back-and-forth talks in recent days after the hiring of Microsoft’s global ad sales head Carolyn Everson by the Silicon Valley social networking powerhouse to be its VP of global sales.

Among the more likely solutions being discussed: Barring Everson–a longtime ad sales exec who came to Microsoft from MTV Networks–from using any strategic information she learned at the company and also from contacting certain ad clients on behalf of Facebook for a certain period of time.

While a legal action to stop her from actually taking the position is the most serious option, it is certainly not without precedent for Microsoft. The company recently got a temporary restraining order to block one of its top government relations execs, Matt Miszewski, from working at Salesforce.com, pointing to non-compete and confidentiality contracts.

Whatever happens, it is clear the Everson hiring has infuriated Microsoft execs, especially CEO Steve Ballmer, since the company regards Facebook as a close partner. Microsoft is also a longtime investor in Facebook.

While considering a temporary restraining order against Everson in this kind of situation–since it is essentially the same job–is standard operating procedure for any company, several sources said tensions are higher than usual.

“This is just tone deaf on Facebook’s part not to think this would not be a problem,” said one person.

One particularly irksome aspect–top Facebook execs did not call Ballmer before news of the appointment leaked out to assuage the situation.

Facebook COO Sheryl Sandberg did release a statement when BoomTown broke news of the move in mid-February, in an attempt to make nice.

“Microsoft was one of our earliest partners and is still one of our most valued,” she said, in part. “We look forward to continuing to expand our relationship with them.”

Her dulcet words have apparently not worked.

In fact, the talent raid came as a surprise to many at Microsoft, especially since Everson (pictured here) had been hired in June after a long search and had become a high-profile presence at internal and external Microsoft events.

That included organizing the splashy “Imagine 2011, Microsoft Advertising’s Marketing Leadership Summit.” The event is set to take place at the end of March at the software giant’s Redmond, Wa. HQ and will include an evening concert by the band Train.

Now she will be doing such things for Facebook, where Everson will be replacing longtime and well-regarded ad exec Mike Murphy, who left the Palo Alto, Calif., company last fall. She will report to former Googler David Fischer, VP of Advertising and Global Operations.

Having a top exec who is amenable to and well known by Madison Avenue is key for Facebook as it ramps up its business, in anticipation of an IPO next year.

Despite being private, Facebook has recently been valued at between $50 and $60 billion by investors, who have been eagerly buying up shares of the company on secondary markets.

Under Murphy and Fischer, ad sales have been doing well already. Facebook’s share of online display advertising has more than quadrupled, from about three percent to almost 14 percent of the nearly $9 billion U.S. market, according to a recent survey.

In growing so quickly, Facebook has grabbed ad revenue–reportedly $2 billion last year–from old online powerhouses, especially Yahoo, Microsoft and AOL, and is also in a big fight with Google over premium ad sales.

Facebook’s surging usage and engagement are the reasons for the increased interest from advertisers, as well as its global growth in both market share and mindshare of consumers.

The opportunity at Facebook is clearly a big–and probably irresistible–move for the dynamic Everson, who has mostly worked in the mainstream media for much of her career.

Still, while movement of execs among top tech companies is not uncommon, there has been a lot less from Microsoft to Facebook.

Instead, Facebook has been most aggressive in its efforts to attract talent from Google.

No longer. In fact, the week before Facebook grabbed Everson, it also hired an up-and-coming exec, Chris Daniels, GM of Bing Mobile Product Management, to be its director of business development.

Still, there is some hiring war history between the companies. In late 2008, Microsoft’s Ballmer managed to lure former Yahoo exec Qi Lu to run its Online Services Division, several sources at both companies said, after he had told Facebook he would work there as its engineering lead. Lu had also been heavily recruited by Google.

Eventually, that was water under the bridge, which is what Facebook is hoping will happen with Microsoft over Everson.

Also important in the weighing of options at Microsoft is the obvious importance of keeping up good relations with Facebook. It is an important partnership, especially for its Bing search business, as an advantage over Google.

“Everyone is hoping to resolve this amicably,” said one person close to the situation. “There has been some damage to the relationship for sure, but the question is whether Microsoft wants to do something that would escalate that damage.”

Not surprisingly, both Facebook and Microsoft declined to comment on the fracas.

“We know people care more about what they do than where they do it,” Microsoft Office unit Vice President Takeshi Numoto said in a blog post published on Tuesday. “Whether it’s on a PC or Mac, a mobile phone or online through the Web Apps on multiple browsers, we continue to bring Office to the devices, platforms, and operating systems our customers are using. It should be about the ideas and information, not the device, right?”

Of course, OneNote is just one piece of Office–and one of the newer and least used of the main components at that. It’s also an interesting choice, since OneNote isn’t available natively for the Mac. But Microsoft seems to be leaving the door open to bring other pieces of Office to the iPhone.

In an interview, Microsoft senior director Jason Bunge said that the company had been working on OneNote for the iPhone for the past 18 months. Bunge wouldn’t say whether other Office components are also in the works, saying only that the company had no other apps to announce at this time.

“You can absolutely expect Office to expand its presence across other platforms,” Bunge said.

As for whether Microsoft plans to eventually charge for OneNote or other iPhone apps, Bunge said he didn’t know how long OneNote would remain free and had no other details on Microsoft’s pricing plans.

The goal in bringing OneNote to the iPhone, he said, is to allow those who do use the program on the PC to have it with them wherever they are. Rival programs, such as Evernote, have already been available on the iPhone.

Bunge did put in a bit of a plug for Windows and Windows Phone, saying, “We want Office on our Windows devices to be the best productivity experience that’s possible.”

OneNote is not Microsoft’s first app for the iPhone. Redmond already offers a Bing app, as well as Windows Live Messenger and the Microsoft Tag barcode reader, among other programs.

Update, 12:15 pm PT: Some people, including Mobilized, are getting an error message when they try to log in with their Windows Live ID. Since OneNote for the iPhone requires a Windows Live account, it effectively means those encountering the bug can’t use OneNote for the iPhone at all for now.

Microsoft says it is aware of the issue and is investigating.

1:45 pm PT: Microsoft has posted a blog noting the issues and says they are appearing intermittently as a result of high demand, with the recommended approach as “just keep trying.”

Palm: Stay the cool kid at Hewlett-Packard, so it’ll keep giving us lots of toys and not merge the smartphone acquisition into the PC unit. Release that tablet we’ve been working on and get our phones out of the clearance section of the stores. Remember to include “and printers” on all our slides when asking for more money.

Microsoft: We were going to copy and paste from last year’s resolutions, but it turns out we can’t copy and paste yet. So, that’s resolution No. 1. But since we’re going to solve that in January, we’ll move on to some other ambitions. Let’s see, open up to more developers, convince developers we’re worth their time, add features, support more networks.

Hmm. Last year’s “Try not to suck so much” is starting to seem easy by comparison.

Research in Motion: Learn some new ways of saying “Everything is great,” so it doesn’t get too repetitive in public speeches. Meanwhile, keep shaking things up behind the scenes. Buy a few more companies. Get some apps for that PlayBook. Find some more really big countries that the other people are ignoring and sell them a boatload of BlackBerrys.

Samsung: Keep going with this whole Galaxy thing–it worked to the tune of about 10 million phones this year. Try to convince Google phone king Andy Rubin to get a tattoo that reads “Galaxy S smartphone.” Remind the carriers that they really did agree to market all our phones that way.

HTC: Good thing we went Android a couple years back, but now we’re kind of glad we didn’t give up on Microsoft. Now, we have to figure out how to convince them to let us customize Windows Phone 7.

Motorola: Keep telling Verizon and Google that they’ve hurt our feelings and see what other perks we can get via guilt. Hey, it worked well with that tablet, didn’t it?

Apple: We are already perfect, so where do you go from there? Follow a magical 2010 with an even more magical 2011. How’s that?

What else? Let’s see. Okay, here’s one: Keep trashing smaller tablets until the day we come out with one.

Google: Release six or seven more versions of Android. Rename “Nexus Tablet You Should Have Made” to something less insulting to the hardware makers. Travel to foreign countries and discover more desserts, because we’re running out of code names for the next version of the tasty mobile operating system.

Nokia: Ship something to the U.S. so they’ll stop making fun of us and realize that we actually do make smartphones. Speaking of shipping, we really should ship some of these products we’ve been talking about for years. Most people are starting to think “Meego” is just a code word we use when we don’t know what to say.

Verizon: Stay on Steve Jobs’s good side. Print iPhone posters on the back of all those Droid billboards from last year. Release a whole bunch of LTE phones, so that the iPhone shelf isn’t lonely in the stores.

AT&T: Work on next-generation networks using that spectrum we picked up from Qualcomm. Talk about how we really love the other non-iPhone smartphones and actually mean it this year, because we have to.

T-Mobile: Keep talking about how we can just keep making the current network faster, while trying to convince the feds to let us have some more spectrum. Make more of those commercials making fun of AT&T. They are funny and it’s so much easier than having to deal with Catherine Zeta-Jones. And lots of Android, along with some tablets too.

Sprint: Find a way to remind people that, while we still don’t have an iPhone, we do have a next-generation network up and running, complete with phones and data devices. Add a 4G tablet or two to the mix. (Hey, Jon Rubinstein, is that PalmPad ready yet?)

“We know we have tough competition, and this is a completely new product,” Vice President Achim Berg said in an article on the company’s press Web site. “We’re in the race–it’s not a sprint but we are certainly gaining momentum and we’re in it for the long run.”

Until now, Microsoft had said that it was “happy” with sales, but had refused to say how many devices had sold. AT&T and T-Mobile had also declined to say how many models had sold since U.S. sales started Nov. 8. Windows Phone 7 models went on sale in Europe in late October.

Berg repeated that the sales have met Microsoft’s expectations.

“Yes, and I think our expectations are realistic for a new platform,” he said, noting that the company is essentially starting over with Windows Phone 7. He also cautioned against comparing it to the competition. “It’s a bit of apples and oranges comparison; our numbers are similar to the performance of other first generation mobile platforms,” Berg said. “We introduced a new platform with Windows Phone 7, and when you do that it takes time to educate partners and consumers on what you’re delivering, and drive awareness and interest in your new offering. We’re comfortable with where we are, and we are here for the long run; Windows Phone 7 is just the beginning.”

Microsoft is expected to announce an update for Windows Phone 7 in January that will add a copy-and-paste function as well as support for CDMA carriers. That will allow Verizon and Sprint to offer Windows Phone 7 models. Both carriers have said they will, but Microsoft made the decision to delay CDMA support until next year in order to meet its goal of having the initial version out by this year’s holiday season.

Berg also noted it plans to have phones at a variety of price points next year. Nearly all of the models that went on sale in the U.S. were priced at $199, although there has been some significant discounting.

IDC analyst Al Hilwa said in a note that he is particularly impressed by the speed with which Windows Phone 7 applications have hit the market.

“The Windows Phone 7 Marketplace reaching 4,000 apps two months after launch has to be one of the most rapid ramp-ups in recent times,” he said in a note to reporters. “Of course with both iPhone and Android app stores being much bigger, Microsoft still has its work cut out for it. However, reaching this milestone faster than Android which took from Oct 2008 to March 2009 to reach about the same level, it is not bad!”

Hilwa also said that Microsoft hasn’t done bad in having 10 phones on the market in 30 countries.

“Windows Phone 7 has changed the conversation and I would not be surprised if Microsoft had the third largest app portfolio in the industry by the middle of next year,” he said, pointing to the company’s strong set of developer tools.

Update: It is worth noting that the 1.5 million units represent “sell in”–that is, the phones that device makers like Samsung and HTC have sold to carriers, not the number of phones actually purchased by consumers. We’ll have to wait a bit to hear about those “sell through” numbers.

We’ll also see what they have to say about the Yahoo search partnership and its efforts to catch up with Google (and trip them up with antitrust headaches).

Liveblog

Okay. I’m onsite and nearly caffeinated. Yes, there are donuts, but Mobilized is going for the savory option.

10:03 am: Still waiting for things to get started here.

10:04 am: Microsoft search engineering head Satya Nadella comes out. “Okay, let’s get this thing underway.”

10:06 am: First up, some momentum stuff. Share is at 11.8 percent per comScore numbers released yesterday, up another 0.2 percent from October. Overall up 48 percent since launch. “We’re very, very happy with that growth.” Now over 90 million users, but the big deal, he says, is more heavy searchers. “We never had the fans of Bing and the heavy users,” Nadella says.

10:08 am: Nadella says Bing is still getting a larger percentage of 18- to 24-year-olds than its share of searchers as a whole.

10:09 am: “These are footholds that we have in the marketplace,” Nadella says.

10:11 am: Continued focus on specialized verticals (like travel, music, health, image search etc). Overall, such searches account for five percent of all queries, but specialized search makes up of 10 percent of Bing’s searches.

10:12 am: Partnerships: Yahoo is obviously the big one, but Nadella shows slide with Facebook, Twitter, Verizon., BlackBerry, Apple, Android, Foursquare and other logos.

There ave been 5.5 million downloads of the iPhone app.

Nadella says the toolbar deals are also important: They just give us a shot at acquiring the users. They have another one coming with Conduit. Also, they are now at least an option on iPhone and Firefox.

10:16 am: Nadella says the engineering team is focused on three areas, beyond the “arms race” of overall search quality–increasing the visual organization, task-centered nature and social elements of search.

“We’re neck and neck in terms of search quality and we are able to maintain it,” Nadella says.

10:18 am: Lots of talk about the ins and outs of search tech. Nadella says Microsoft has moved from a “neural net” approach to “boosted decision trees.” (No idea what that means.)

10:22 am: Effort to make search more social is important, but just beginning. “This is a journey we are at the very beginnings of,” Nadella says, but says social will change search in terms of how results are discovered, formulated and answered.

10:24 am: Nadella is talking about the importance of visual highlighting to call out various results as well as boosting interactivity, such as including forms within results so users can take action.

Still waiting for any new stuff, but we’re told it’s coming.

Nadella says the company has broken down a list of the tasks people are trying to do when they are trying to do more than just navigate to a particular site.

“We have a pretty granular understanding just looking at the query stream of what people are trying to get done.”

Microsoft has broken it down to some 150 categories, but here are some of the top ones: 4.6 percent of searches are music related, 1.8 percent clothing and shoes, 1.6 percent consumer electronics, 1.1 recipes, 1.3 percent home furnishings.

10:29 am: On to some new stuff.

New image search launching today, but first Microsoft is talking about visual search for things like finding movies and giving direct answers for some new types of queries.

10:31 am: Microsoft is talking about any sort of non-search result as “answers.”

In one case, an “answer” for the query “let’s make a deal” would be video episodes of the game show.

But Microsoft says that automatically putting it at the top is not necessarily best. What the company says it should do instead is put it below the first two results, such as the show’s homepage, which get more clicks than the video.

10:35 am: Also when a user searches flights from Denver to Las Vegas in June, Microsoft pre-populates the fields in a flight search with a guess at the dates, in this case the first weekend in June.

10:38 am: New image search represents first major changes in a year. Biggest shift is white space is gone with just a ton of tiles of images, with some categories at the top.

For example, search “Casablanca” and you get an option for the city in Morocco, another for the movie, a third for the style of wedding dress and another for the Casablanca Lily flower.

10:40 am: On to shopping. Quadrupled the number of products in its database.

10:43 am: Bing is adding a new focus on places as “destinations” with all the potential content from booking a flight or hotel to maps and attractions.

Which is nice, because I’m ready to go on a vacation right about now.

They use weather data to show times to go to and times to avoid a particular place.

10:45 am: Microsoft is beefing up event listings with partnership from FanSnap and other partners. You get ticket info, diagram of stadium, etc.

10:50 am: Back to social. Nadella says search can change by using one’s social graph to influence search results.

First example, you will start to see when your Facebook friends “Like” a page that is in search results.

For now, such results will only come up fairly infrequently, but Nadella says it will be a big deal when you do see pages that your friends have liked.

Search allows the data your friends share on Facebook to come to you when you actually want the information.

“In a way you are taking your friends with you,” says Microsoft’s Paul Yiu.

An example is when you are shopping for a product or going to visit a place–that’s a time when you really want to know what your friends think.

(Seems pretty cool, but wondering just how infrequently this will show up.)

10:57 am: Another example Yiu gives is a search one might do at 3 am for what will make your baby stop crying. There are lots of results, but one that your friend likes might be worth trying first.

11:00 am: Bing is also using one’s Facebook social circle to rank results in people search–i.e., if you have a friend in common, it will rank that “John Doe” higher than one you don’t know.

11:01 am: Nadella is back to talk about local and maps and how that integrates with mobile. Behind him Blaise Aguera y Arcas is pulling out several phones to do a demo. (And they look like iPhones.)

11:03 am: Aguera y Arcas takes the stage to show some changes coming to maps, first on the desktop. He notes the recent shift away from putting its most powerful map features on a Silverlight-powered site. Now it is moving that all to an HTML5-based site that needs no plug-ins.

11:07 am: Bing is bringing the “tasks” concept to searches within maps. A search for a restaurant now brings up not just a map, but more info on the eatery and also the ability to make reservations via OpenTable.

11:09 am: Aguera y Arcas switches to the iPhone. Shows how people can add their own panoramas to maps using a cellphone.

11:13 am: iPhone demo over 3G is going really slow. Aguera y Arcas asks how many of the reporters in the room are using 3G.

11:15 am: Although its going painfully slow, looks like Bing app starts to recognize a restaurant search and pops up options like types of cuisine and price. The goal is to save keystrokes.

Other options are things like get a map, make a reservation, menus, etc.

Still R-E-A-L-L-Y S-L-O-W.

“This bandwidth situation is really going to suck for what I have to demo next.”

He switches to a first-person StreetSide view, but all we see are dots.

“This is so sad,” Aguera y Arcas says, lamenting that we aren’t able to see all the cool stuff. There does seem to be some new StreetSide view stuff on the iPhone app that could be neat, assuming it runs faster on the street than inside this demo room.

11:23 am: We’ve reached a new low. “Close your eyes and imagine….” Aguera y Arcas says, and then describes what the app would do if we could see it.

11:23 am: And they have switched to Wi-Fi. “This is so exciting,” Aguera y Arcas says. Now he’s going back to StreetSide. “That’s so much nicer.”

As for directions, Bing now has bus directions with schedule info in addition to driving and walking directions. “It’s about time,” he says. “I’ve been waiting for this one myself.”

Another feature reminds you to do something when you reach a certain place, like call someone or check-in to FourSquare or Facebook.

11:29 am: Aguera says we are in Search 2.0–where you do more than just search and get results.

Image search is an example. Shows the coming ability to search for something by using a camera to start a search. Basically you can shoot a picture of a page and use any of the terms there to start searching (It uses character recognition in the background).

Questions and Answers

11:32 am: How big a deal is Google Instant?

“We are absolutely studying Google Instant,” Nadella says. Says they could match it. It’s a question of whether it makes task completion easier. “Is it a value or a distraction?” Doing studies and so far Microsoft’s research says it is mixed at best.

“It’s not a game changer. It’s a nice feature at best.”

He hedges a bit on whether it is something Microsoft needs to match.

11:39 am: Mobile features were demoed on iPhone. So when will they come to Windows Phone 7 and other platforms?

Nadella says they now have software for most major phone operating systems, including Android.

“The different devices have different schedules,” he says.

11:42 am: And we’re out of here….Thanks for tuning in.

The General Services Administration–which oversees government procurement–will soon become the first major federal office to move to cloud-based email and calendar apps on an agency-wide basis. And it’s chosen Google Apps to do it.

A hard-won victory for Google, which beat out Microsoft for the $6.7 million five-year contract, leaving the folks up in Redmond more than a little peeved to see Office’s ubiquity in government threatened in this way.

“We are disappointed in the GSA’s internal e-mail decision,” the company said in a post to its “Why Microsoft” blog, adding that it is nonetheless “gratified that so many federal, state & local governments have chosen Microsoft to meet their business needs.”

You can almost hear the gritting teeth, can’t you? The horror of 15,000 GSA employees all using Gmail….

So again, a coup for Google, which has been working hard to push its cloud computing suite of messaging and collaboration apps to the government.

Interestingly, sources close to the negotiations tell me that the RFP (Request for Proposal) for the GSA contract was amended midway through the process to allow for offshoring of government data outside the United states–as an accommodation for Google.

Which is odd, because you’d think that if the United States government is embracing cloud computing, it would prefer the clouds in which its data is stored to be within its own borders. That Google requested and was granted the option to store GSA data offshore isn’t necessarily troubling (it must meet GSA security requirements regardless), but it is…interesting.

Google wouldn’t tell me the reason for its request, although I’ve heard it may have something to do with how the company segregates data and apps geographically. It was, however, quick to insist that it isn’t planning to offshore any U.S. government data entrusted to it–at least, currently.

Said spokesman Andrew Kovacs, “The government’s starting with Gmail and Calendar, and their data will be stored in a segregated system located in the continental United States that is exclusively for our government customers.”

Late Wednesday, its Motorola Mobility subsidiary slapped Microsoft with a lawsuit accusing the company of infringing 16 of its patents in a variety of products– including Windows, Exchange, Messenger, Outlook, Windows Marketplace, Bing Maps and Xbox.

“[We are] bringing this action against Microsoft in order to halt its infringement of key Motorola patents,” Kirk Dailey, corporate VP of intellectual property at Motorola Mobility, said in a statement. “Motorola has invested billions of dollars in R&D to create a deep and broad intellectual property portfolio and we will continue to do what is necessary to protect our proprietary technology.”

Microsoft, for its part, seems largely unfazed by Motorola’s right-back-at-ya maneuver. Indeed, in a statement, Horacio Gutierrez–Microsoft’s deputy general counsel of intellectual property and licensing–essentially said the company was waiting for it. “This move is typical of the litigation process and we are not surprised,” he said. “We remain confident in our position and will continue to move forward with the complaints we initiated against Motorola in the U.S. District Court for the Western District of Washington and with the International Trade Commission (ITC).”

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.

Of course, Apple (AAPL) did just that, hitting its 10-million objective by the end of its 2008 September quarter.

And now Microsoft (MSFT) claims it will exceed Apple’s iPhone goal three times over with the launch of Windows Phone 7. According to a Microsoft presentation made at ReMIX France and spotted by MobileTech World, Redmond hopes to sell 30 million Windows Phone 7 devices by the end of 2011. And it cites some IDC data to back that goal.

Now, during his Consumer Electronics Show keynote in 2009, Microsoft CEO Steve Ballmer claimed sales of 20 million Windows Mobile devices. “We have delivered 11 different mobile phones that have each sold a million units each, and in the past year,” Ballmer said. “We’ve brought to market over 30 new Windows Mobile phones, or more than any other mobile platform in the market…and our partners have sold more than 20 million Windows Phones in the past 12 months.”

So perhaps it’s not unreasonable to think the company could sell 30 million devices running Windows Phone 7, which seems a far, far more compelling operating system than its predecessor.

That said, there’s one very important point to make here: The IDC data on which Microsoft bases its claims include all versions of the Windows Mobile OS, not just Windows Phone 7.

In other words, the IDC data do not support Microsoft’s claims. “The figures cited include both Windows Phone 7 and Windows Mobile 6.x,” IDC told me. “To say that they are purely Windows Phone 7 units is a misnomer; it’s not an accurate representation of our data.” The research house added that the slide at issue here wasn’t created or approved by IDC.

That’s unfortunate, because Microsoft’s slide very clearly reads, “30 Million Windows 7 Devices” and the bar graph that’s featured on it reads, “Prévisions IDC”–French for “IDC Forecasts.”

A bit of a cock-up here, then. Though there is one bit of good news: Microsoft got that 30 million number wrong too. According to IDC, the real number is 32 million–and that’s for 2011 sales of devices running all versions of Windows Mobile OS. And, as Mary Jo Foley notes over at ZDnet, “… who in his/her right mind is still going to buy a WM 6.x phone (which is not backward-compatible with WP7) as of this fall?”

UPDATE: Here’s Microsoft’s comment on the matter:

At the reMix conference in Paris, Microsoft presented a slide projecting the number of Windows Phone 7 phones to be sold in 2011. This slide was inaccurate, and intended to represent an analyst’s assessment of the market opportunity. We have not provided any sales forecasts for Windows Phone. Microsoft is introducing a fundamentally new design and experience with Windows Phone 7 in an effort to reposition our mobile business for the long-term.”

[Image Credit: MobileTech World]

“We have to let go of the notion that for Apple to win, Microsoft needs to lose.”

— Apple CEO Steve Jobs, August 1997

And there it is. Today Apple, not Microsoft is the world’s most valuable technology company.

As I write this Apple (AAPL) shares are trading at $244.87, giving it a market capitalization of $223.1 billion. Meanwhile, shares of Microsoft (MSFT) are trading at $24.79 and the company’s market cap sits at $217.78 billion (see table below; click to enlarge).

And so Cupertino has finally surpassed Redmond in total value. The only American company with a market cap greater than Apple is Exxon Mobil (XOM).

UPDATE: Apple closed the day well ahead of Microsoft. Its market cap: $222.07 billion; Microsoft’s: $219.18 billion.

PREVIOUSLY:

• Dueling Market Caps: Apple and Microsoft

Yesterday Armstrong sent CFO Artie Minson out to Barclays Capital to repeat the message. It got through. Here’s analyst Douglas Anmuth noting that ad sales will be underwhelming for a while, even though the Web ad business is bouncing back:

Management was quick to point out that AOL’s overall display pipeline for the back half remains soft. Management indicated that it has booked roughly 60% as much inventory for the back half as it had booked at the same time last year–and that was in a softer overall macro environment.

On the plus side, pricing for the ads AOL (AOL) does sell are improving, which it can attribute both to the overall recovery and AOL’s focus on selling high-end inventory while dumping its low-cost stuff. Still, Anmuth says, “We do not expect the uptick in CPMs to offset the removal of low quality ads and the sales force dislocation in the near term.”

So lower those expectations, okay?

But not too much!

AOL also suggests that its new search pact, which will replace the one with Google (GOOG) that expires in December, will be a big deal. According to Anmuth, “Management is approaching the renewal as a broad strategic partnership for the company that has many potential outcomes. AOL mentioned mapping and local could be part of the deal and we wouldn’t be surprised if a display ad partnership was also included.”

Barclays thinks Armstrong’s recent hire of ad tech executive Alex Gounares from Microsoft (MSFT) means the deal could end up tipping to Redmond. Stay tuned.

With much easier comparisons due to a devastating period last year and an upswing in PC sales, Microsoft posted solid third-quarter earnings today after the markets closed.

The Redmond, Wash.-based software giant said it had revenue of $14.5 billion in the quarter ended March 31, a six percent rise from a year ago.

Net income was $4.01 billion, or 45 cents a share.

That’s despite forking over $78 million to Yahoo in the quarter as part of Microsoft’s online search and advertising partnership with the company.

The numbers handily beat Wall Street expectations of $14.4 billion and 42 cents a share.

Microsoft (MSFT) said the results included “the deferral of $305 million of revenue relating to the Microsoft Office 2010 Technology Guarantee program. Adjusting for the revenue deferral, third-quarter revenue totaled $14.81 billion, an increase of eight percent over the prior year period.”

“Windows 7 continues to be a growth engine, but we also saw strong growth in other areas like Bing search, Xbox LIVE and our emerging cloud services,” said CFO Peter Klein in a statement. “Our record third-quarter revenue along with continued rigor on cost management resulted in exceptional EPS growth.”

Was it just a year ago, battered by the econalypse, that Microsoft reported its very first drop in revenue, as well as a disastrous net income?

At the time, then-CFO Chris Liddell noted that the recovery would not happen quickly, but be “slow and gradual.”

That was largely due to weak PC sales, of course. And it led to layoffs and a general mood of gloom over the company.

Last year in the same quarter, Microsoft whiffed big time, reporting revenue of $13.7 billion, down from $14.5 in the third quarter of 2008. Net income was worse, down to $2.98 billion from $4.4 billion the year earlier.

But PC sales are up, which is always good for Microsoft. Its stock has been up because of it–almost four percent just this week.

This year, the company also has sales of the new Windows 7 operating system to goose results.

And the next quarter will also probably look good as Microsoft releases its cash-generating Office 2010 version to businesses and consumers.

The Entertainment and Devices division, which includes Xbox, was up, earning $165 million, from a $41 million loss a year ago.

But the long-suffering Online Services Division–home of the company’s Bing search service–was, more than ever, money-losing. It lost $713 million in the quarter, compared with a loss of $411 million last year.

The red ink was even more so, since Microsoft forked over $78 million to Yahoo (YHOO) in the period, which certainly brightened Yahoo’s bottom line in its report earlier this week.

Here’s the Microsoft press release with tables:

letterheadQ3

Yahoo said it has hired former Microsoft exec Blake Irving (pictured here) as its chief product officer.

Reporting directly to CEO Carol Bartz, Yahoo (YHOO) said in a statement, Irving will “lead the company’s products organization, which is responsible for the vision, strategy, design and development of Yahoo!’s global consumer and advertiser product portfolio.”

In other words, the exec many think the company desperately needs to spur innovation.

Irving replaces Ari Balogh, who announced last week he is leaving the company as of June 3.

Balogh was also CTO, but Yahoo did not say who would get that title.

In related news, Prabhakar Raghavan, head of Yahoo Labs as chief scientist, will now report directly to Bartz.

The Yahoo announcement confirms a post BoomTown wrote last week about the company’s effort to hire Irving, a longtime Microsoft (MSFT) exec whose last job there was corporate VP of its Windows Live Platform group.

He left the software giant several years ago to spend time with his family and had been teaching at Pepperdine University.

Irving had been at Microsoft for 15 years, always commuting to its Redmond, Wash., headquarters.

According to his Facebook page, Irving now lives in laid-back San Luis Obispo, midway between Silicon Valley and Los Angeles.

Sources said after time off, Irving had recently become eager to re-engage in the Internet sector.

Yahoo has long wanted to hire Irving, many said. And in nabbing him, the timing is fortuitous, as the company is in the midst of launching its massive search and online advertising partnership with Microsoft.

The hiring also stems the tide of Yahoo’s exec exodus. Balogh’s parting is one of many among top Yahoo execs recently. Ad sales head Joanne Bradford departed the company to join Demand Media, while longtime tech exec Ash Patel said he would not return from a sabbatical he took last year.

Here’s Irving’s post on his own hire on Yahoo’s Yodel Anecdotal blog:

Yodeling Hello to Yahoo!

As the newest Yahoo! employee, at the risk of being highly corny, I’m delighted to yodel my first purple-hued shout-out to the 600 million people and tens of thousands of advertisers and publishers who enjoy Yahoo!’s products every day.

Some of you might ask why anyone would say goodbye to surfing and cycling the Central Coast of California or travelling the globe with their family to take on the job of leading products and technology at Yahoo! My answer’s pretty easy–meet just some of the brilliant people at Yahoo! that want to change the world, and then scan the amazing list of leading products around the globe these people have delivered at scale. When I think about what this company has meant to anyone who has used the Internet, worked in the Internet industry, or wanted to reach people across the world, there is simply none better.

From wildly popular services like Yahoo! Mail, Yahoo! Messenger, Flickr and Yahoo!’s mobile sites and apps, to Yahoo!’s best-in-class content properties like Yahoo! News, Yahoo! Finance and Yahoo! Sports, to many, many other great products across the world, Yahoo!’s product portfolio continues to be the envy of the industry. Those incredible services and their respective audiences bring tremendous value for advertisers, which is why Yahoo! serves up 10 billion ads across its network every day and is the #1 publisher of online display advertising. How can anyone not want to be a part of that?

And that’s just what consumers and advertisers see from the outside. Inside Yahoo!, there’s technological and scientific brilliance everywhere you look. With 500 patents, one of the world’s largest cloud computing infrastructures, and top scientific talent across computer science, machine learning, economics and social sciences, I’m awed at the caliber of people I’m going to be working with. The intellectual horsepower doesn’t stop there–I’m looking forward to working with some of the smartest and best-in-class talent around the world in marketing, advertising sales, partnerships, programming, service engineering and operations. The commitment Yahoos have shown over the years to delivering the best experience to both consumers and advertisers is one of the key things that attracted me here. We’re in the business of delivering bespoke experiences to our consumers, partners and advertisers and I’m looking forward to working with all of you to build on that reality.

This week marks an exciting new journey for me personally, and I’m thrilled to be sharing my experiences and background with the world class people at Yahoo! We have big opportunities, as well as big challenges ahead of us, and I’m getting ready to dive in and work with this great team to make Yahoo! even more central to daily online life than it has been over the past decade and a half.

My first day in the office will be May 17th and I can’t wait to get started. Stay tuned for more as I get settled and dig in with my new team.

‘Nuff said.

–By Blake Irving, Future Chief Product Officer, Yahoo!

And here’s the official press release:

Blake Irving Joins Yahoo! as Chief Product Officer

Chief Scientist Position, Held by Prabhakar Raghavan, Elevated to Report to CEO Bartz

Sunnyvale, California–April 19, 2010–Yahoo! Inc. (NASDAQ: YHOO) today announced the appointment of Blake Irving as Chief Product Officer. In related news, Prabhakar Raghavan will continue to lead innovation efforts at Yahoo! Labs as Chief Scientist. Both Irving and Raghavan will report directly to Carol Bartz, CEO. This new leadership will focus on speeding key inputs and decision making into product strategy and direction.

Ari Balogh, current head of products and technology, will be leaving the company on June 3 for personal reasons and will work closely with Irving to ensure a smooth transition. Irving will assume the position on May 17.

“Blake brings to Yahoo! genuine large scale Internet expertise from a mature company known for world-class technology. In addition, Prabhakar has invaluable technological insights and expertise that I look forward to having my executive team hear more directly,” said Bartz. “With leaders like Blake and Prabhakar, I am confident that we will increase technological innovation and deliver against our vision to be the center of people’s online lives.”

“Yahoo! has an impressive product and technology portfolio that has provided unparalleled value to its customers at scale,” said Irving. “I look forward to working with the team to bring forward more unique and highly personal experiences to Yahoo! consumers, deliver on the company’s promise of Science, Art and Scale to Yahoo! advertisers, and develop the amazing talent at the company so we may continue to deliver more and faster innovations to the market.”

As Chief Product Officer, Irving will lead the company’s products organization, which is responsible for the vision, strategy, design and development of Yahoo!’s global consumer and advertiser product portfolio.

Irving was most recently a professor at Pepperdine University’s Graziadio School of Business and Management in Malibu, California. In his prior role as corporate vice president of the Windows Live Platform group, Irving led a team of 4,000 to build and operate Microsoft’s Internet-scale services platform, advertiser and developer ecosystem. Irving also held a variety of development and general management positions at Microsoft.

Before joining Microsoft, Irving held development and product marketing management positions at Xerox Corp., Oki Electric Industry Co. Ltd. and Compaq Computer Corp. He received a Bachelor of Arts degree from San Diego State University and a Master’s degree in business administration from Pepperdine University.

Raghavan joined Yahoo! in 2005, and serves as Chief Scientist and head of Yahoo! Labs. Raghavan’s research priorities include text and web mining, and algorithm design. Prior to joining Yahoo!, Raghavan was the chief technology officer at Verity and held a number of technical and managerial positions at IBM Research. He is a consulting professor of Computer Science at Stanford University and former editor-in-chief of the Journal of the Association of Computing Machinery. He has co-authored two textbooks on randomized algorithms and information retrieval. Raghavan received his PhD from Berkeley and is a member of the National Academy of Engineering, as well as a fellow of the ACM and of the IEEE.

According to numerous sources, Yahoo has been seriously courting former Microsoft exec Blake Irving to take over as one of its key execs, running its product organization and essentially becoming the Internet “visionary” many think the company lacks.

While it is unclear if Irving has agreed to take the job, sources said Yahoo (YHOO) management was keen on him working there.

A Yahoo spokeswoman declined to comment when BoomTown asked about its discussions with Irving about the job.

I also reached out to Irving, but he has not responded.

It’s unclear what the move means for current CTO and Chief Product Officer Ari Balogh. But sources said Balogh has been involved in the search, and was planning on taking some time off from Yahoo or even quitting soon for personal reasons.

Irving, who was well liked at Microsoft (MSFT), could certainly fill Balogh’s shoes, having run major businesses there for many years in a variety of executive jobs.

He left Microsoft in 2007, as its corporate VP for the Windows Live Platform group, after being there for 15 years to spend some time with his family in California. Irving had always commuted to Microsoft’s Redmond, Wash. headquarters.

According to his Facebook page, Irving now lives in laid-back San Luis Obispo, which is midway between Silicon Valley and Los Angeles.

Sources said after time off, Irving had recently become eager to reengage in the Internet sector.

Yahoo has long wanted to hire Irving, many said. And, if it did manage to nab Irving, the timing would also be fortuitous, since the company is in the midst of launching its massive search and online advertising partnership with Microsoft.

Balogh’s possible parting is one of many among top Yahoo execs recently. Ad sales head Joanne Bradford departed the company to join Demand Media, while longtime tech exec Ash Patel said he would not return from a sabbatical he took last year.

Here is Irving’s bio, from a page still up at Microsoft’s Web site:

Blake Irving left Microsoft in 2007 after 15 years with the company.

In his last role as corporate vice president of the Windows Live Platform group (WLP), Blake Irving led the effort to build and operate the most efficient, global Internet-scale services platform with the broadest and most profitable advertiser and developer ecosystem. In this capacity, Irving was responsible for driving and managing datacenter and technical operations.

Irving joined Microsoft in October 1992 and has served in a variety of development and general management positions. Irving and his teams have been responsible for Microsoft’s first Internet video conferencing and collaboration products, Internet phone, Internet mail client and instant messaging and blogging service. Irving has held development and marketing management roles on the Microsoft® Internet Explorer browser software and Windows® operating system teams.

Before joining Microsoft, Irving held development and marketing management positions at Xerox Corp., Oki Electric Industry Co. Ltd. and Compaq Computer Corp. He received a Bachelor of Arts degree from San Diego State University and a master’s degree in business administration from Pepperdine University.

It’s more than a little ironic that the new “Glo” Web site–a highly stylized women’s lifestyle destination MSN debuted just after midnight today in partnership with Hollywood’s BermanBraun and Hachette Filipacchi Media U.S.–will likely be one of the online media sites that shine best on the new Apple (AAPL) iPad.

Even though it was conceived before the tablet was announced and currently uses Apple-barred Adobe (ADBE) Flash in its headline rendering (soon to be adjusted), Glo is actually more aimed at upending the notion of what makes a good women-focused Web site.

With a vertical sweep, simple clean lines and a swoosh navigation bar, it’s the kind of new Internet sensibility informed almost entirely by touch, feel and–especially–visual elements.

And while it has a decidedly glossy magazine tone, Glo is also heavily laced with tools such as online scrapbooks and is strongly social, with deep links into Facebook and Twitter.

Of course, since it is a Microsoft (MSFT) property, Glo also was required to make copious use of its Bing search engine, links to which are constantly present and mostly useful.

Glo is the second dramatic site designed, created and run by the Los Angeles-based production company run by former Yahoo (YHOO) media chief and well-known television exec Lloyd Braun and his business partner, Gail Berman.

The first was a very different kind of celebrity site, Wonderwall, whose consumer engagement metrics have pleased advertisers so much that MSN ordered up another one aimed at fashion, decor, relationships and beauty.

“Obviously design plays a huge role in all we do,” said Braun in an interview with BoomTown yesterday. “We think there is an enormous opportunity to create content and program in a very different way.”

Braun said the site was trying to approximate the “endorphin release” that occurs when women get a new fashion magazine in their hands.

Berman agreed. “There is something very powerful about the connection you can establish with a magazine that has not yet been replicated online as well,” she said. “We are aiming to have a true voice to reach this kind of level of emotional connection with our readers.”

To help that along, as part of the deal with MSN, announced in December, magazine giant Hachette–publisher of Elle, Woman’s Day and Elle Decor–is providing content and editorial expertise to Glo.

There will be seven “packages” a day, with access to archival content too.

Like Wonderwall, Glo will aggregate original, Hachette and third-party content from a variety of partners, but have a voice that new Executive Editor Anne Weintraub–who has been online director for Elle magazine–called “inspirational and also aspirational” and with a heavy dose of imagery.

Instead of the unusual horizontal design that scrolls like Wonderwall, though, Glo goes steeply vertical, although still using a plethora of images and a deeply visual sensibility to attract the eye.

“We are trying to grab the reader in a different way, through linear narration,” Weintraub said in an interview yesterday. “And we also want the women who read it to feel that they are one step away in terms of aspirations, that we reflect their reality on a really good day of theirs.”

The business plan, of course, is advertising. The companies said MSN will lead the advertising sales efforts along with HFM U.S. on selected accounts, with JCPenney, Vaseline and Fox Broadcasting Company (think “Glee” and you get the demo being targeted) as inaugural advertisers.

“Advertisers have been looking for premium content opportunities online and they really are not there in this important space compared to what’s out there in print, for example,” said MSN U.S. head Scott Moore. “Like the celebrity category, we see a lot of room to grow by offering something different and of higher quality.”

Todd Anderman, SVP for Digital Media at HFM, which already has Web sites for its well-known magazines, noted that the company was in uncharted territory. “This is a new brand for all three of us,” he said.

Here are some screenshots from today’s debut (click on the images to make them larger), as well as the full press release below:

MSN, Hachette Filipacchi Media U.S. and BermanBraun Unveil Glo, a Premium Online Lifestyle Destination for Women

New site features an innovative design that creates the feel of a magazine experience on the Web for women seeking style, beauty and lifestyle content.

REDMOND, Wash.; LOS ANGELES; and NEW YORK–April 6, 2010–MSN, Hachette Filipacchi Media U.S. (HFM U.S.) and BermanBraun today announced the launch of Glo (www.Glo.com), a lifestyle site that focuses on style, beauty, living and relationship content through a uniquely engaging and dynamic experience. Glo provides users with everyday inspiration and practical ways to attain their best life. It combines the imagery and feel of a magazine with the appeal of a dynamic site such as WONDERWALL, to offer an online destination that is neither traditional Web nor print, but a unique escape for women on the Web.

Glo utilizes a unique vertical scrolling method, a feature that is exclusive to the site as an online lifestyle destination. Glo presents its topics daily with a fresh and in-the-know perspective, filled with glossy, full-screen photo galleries, videos, and unique features. Glo features original content from its editorial team, HFM U.S. properties, MSN properties and relevant content from popular lifestyle sites including Sugar/Sugar Entertainment, LimeLife, Modelinia, Remodelista and more. Key features of Glo include the following:

• Scrapbook. This feature allows readers to save a custom page of their favorite images and ideas from the site, just as if they were tearing them out of a magazine.

• Sharing tools. Sharing tools are included on each page and allow readers to share articles, videos and more with friends and family via e-mail, Twitter, Facebook and Windows Live.

• Bing integration. Bing, the new generation of search from Microsoft, is deeply integrated throughout Glo. Bing is a decision engine that offers a faster way to make more informed choices.

• Facebook. This feature allows customers to comment on articles and videos they see on Glo using their Facebook login information.

• Full-screen photo galleries. Glo is loaded with visually compelling, full-screen photo galleries, covering a range of topics that are better seen than read, such as the best shade of red lipstick and chic body art.

The design, programming and operations of the new digital brand will be spearheaded by BermanBraun and HFM U.S. Glo is accessible at www.Glo.com, as well as through the MSN home page, editorial programming across the MSN network, and across HFM U.S. online properties.

MSN will lead the advertising sales efforts along with HFM U.S. on selected accounts. Major brands such as Vaseline, JCPenney and Fox Broadcasting Company have signed on as inaugural advertisers.

“We are very happy to be partnering with MSN on the launch of the Glo Web site on behalf of the Vaseline® Aloe Fresh lotion line,” said Srini Sripada, marketing director, Unilever Skin Care. “Our goal is to communicate the light, refreshing sensory benefits of the line, and we believe that Glo provides a unique opportunity to reach women who are looking for light, fresh content. We are excited to be engaging in this endeavor.”

Anne Weintraub, who has held various positions at ELLE including former online director, has been appointed as the executive editor of Glo. She has deep editorial experience running online lifestyle experiences dating back to 1999 when she was the founding editor of Beautyjungle.com. Weintraub also worked as a beauty editor at Vogue, and as a freelance journalist for magazines such as InStyle, Harper’s Bazaar and Self.

Women spend more time online looking at lifestyle content than any other category, with 68 percent saying that going online is a great way to relax and 45 percent marking it as the most peaceful part of their day.1 For MSN, lifestyle is among the most popular content categories, reaching more than 8.2 million unique users a month. MSN will offer Glo in conjunction with its lifestyle portfolio, including MSN Lifestyle, Delish and MSN Health & Fitness.

“Lifestyle is one of our top content priorities because of its popularity among consumers and advertisers, and Glo is a great addition to our lifestyle portfolio. The launches of the new MSN home page and WONDERWALL have shown us the importance of delivering visually compelling and innovative designs and how quickly we can attract millions of customers using the distribution power of MSN,” said Scott Moore, regional partner executive producer, MSN. “We’re excited to build on our successful partnership with BermanBraun, adding the category branding expertise and panache of HFM U.S. to deliver a compelling new lifestyle experience on MSN.”

“Following our successful partnership with MSN in bringing WONDERWALL to the celebrity entertainment space, we are thrilled to be partnering with Hachette and MSN to create Glo–a new and unique lifestyle brand. We believe the innovative design and distinctive tone of Glo will excite both the online audience and our advertising partners,” BermanBraun partners Gail Berman and Lloyd Braun said in a joint statement.

“Like all publishers, we are exploring different ways to deliver content onto all platforms,” said Alain Lemarchand, president and CEO, Hachette Filipacchi Media U.S. “We are very excited about creating a Web-only brand with an original voice that fills an open position in the marketplace. Our collaboration with our two outstanding partners MSN and BermanBraun has been a rich one with each team bringing distinct strengths and voices to the project.”