Live running analysis from the Bill Gates keynote

Scott Fulton, BetaNews: It is the annual ritual event that officially marks the end of the holiday season: the Bill Gates keynote at CES. This year, once again there's speculation over whether this will be the Microsoft chairman's last such keynote appearance, similar to the speculation throughout the '70s and '80s over whether this year's Bob Hope Christmas extravaganza would be the final one.

As far as prognostication is concerned, Gates has been a little off the mark in recent years. Last year, you may recall, he demonstrated the wonders of electronic wallpaper which was capable of changing its mood from bright and bold to warm and cozy, for those moments when you ned to tidy your house real quickly before your grandmother drops by. (Literally, that's the analogy he used.)

Earlier in last year's session, he narrated a complex demonstration of IPTV services replacing everyone's viewing and entertainment habits...a demo that literally fell flat among most observers we talked to.

This year, we're ready for whatever hits us. We have a complete team on hand to witness whatever history there may be, with Nate Mook, Tim Conneally, and Mykel Nahorniak reporting from Las Vegas, and the return of our esteemed Senior CES Analyst Sharon Fisher to help us conjugate the various gerunds and participles we'll inevitably be inundated with.

Scott Fulton, BetaNews: It is definitely Bill's last keynote speech, as he confirmed just a few minutes ago. One of the ways Microsoft is continuing to make inroads in technology, Gates said, is by "taking rich content like elections, and allowing people to navigate those in new ways."

Sharon, how about making voting more feasible?

Sharon Fisher, BetaNews: Yeah, no kidding. And keeping states from eliminating legal voters from the rolls. But don't get me started on that.

9:35 pm ET Scott Fulton: Here, the speech broke for a video featuring a kind of "The Office" - like documentary, featuring Gates' last day at Microsoft.

Thus far, the video features cameos by Steven Spielberg, Sen. Hillary Clinton, Sen. Barack Obama, George Clooney (who may also be running for president at this rate), and former Vice President Al Gore. All of them receive intermittent calls from Gates, asking them what they're up to, and whether they'd like to receive company.

Obama sounds a little confused. "Bill who? Shatner?" he asked.

9:40 pm ET: The next digital decade, Gates outlined, will be defined by three key elements: The first, he said, is "high-definition experiences everywhere." Everywhere and everything could be a display, he said, referring not only in passing to Microsoft's Surface project, but to other everyday items that could, in due course, be upgraded to include a display.

Second, all of these devices will be "service-connected." Using SOA (although he didn't refer to this by name), devices will connect to one another in the ether just by proximity, and users of those devices will be cross-authenticated.

Third is the "power of the natural user interface." This is where the description got very, very cloudy. Whereas the last digital decade was defined by the keyboard and mouse, the next one, Gates said, will be where "the pen, the touch, the visual recognition, all of these things come together." He then added the gesture, as a kind of beckoning motion.

Sharon Fisher: Heh. I've got a gesture.

10:00 pm ET: Scott Fulton: Microsoft will be the exclusive broadband technology provider for NBC during its coverage of the Beijing Olympics later this summer. Over 3,000 hours of video are expected to be made available for random access. Silverlight will be the video delivery platform, so this could be the vehicle that gets Silverlight downloaded and distributed to users right along with Adobe's Flash.

10:10 pm ET Scott Fulton: For a few minutes, Gates demonstrated another application on a Surface-endowed table, where the user is able to customize and select a snowboard, and then negotiate and complete the purchase of that snowboard entirely from the table.

Sharon Fisher: Well, this is all very nice, but how many snowboards does the average consumer design in a lifetime?

Scott Fulton: Sharon, see if you agree with me on this: What I'm seeing appears to be much less about the usual prognostication, and really more about showcasing Microsoft and its partners. Will people walk away from this and think..."Yawn?"

Sharon Fisher: It depends. Certainly I don't see a ton of stuff that's new. On the other hand, there may be plenty of people who a) think this is all new and b) would be happy to have it all from a single vendor. However, the experience I'm having trying to watch the keynote points out something: how many people will have the hardware and the bandwidth required to do this stuff?

Scott Fulton: Can you see this Zune Social demo?

Sharon Fisher:: Yeah, I'm sure the six people who bought Zunes will find it really useful.

Scott Fulton: We're seeing an application where listeners on other Zunes can see everything that one Zune user has been listening to, via what's being described as a very high degree of tracking. The demo says the community has already accepted this and "taken it to the next level."

Sharon Fisher: Whoa! They invented MySpace!

10:25 pm ET Scott Fulton: Some more facts we can expect to learn more about throughout the show: Samsung and HP will be among the companies to incorporate Windows Media extender devices into their HD displays.

Also, Microsoft is working with major cable TV content companies to create interactive content for online distribution using the company's Mediaroom service. Showtime, TNT, and strangely enough, CNN (not MSNBC!) are among Microsoft's partners here. In the latter case, Microsoft is expected to create applications for navigating election returns this year through CNN.com.

There are currently an estimated 100 million Windows Vista users worldwide, we heard repeated, along with 10 million Xbox Live members.

In a demonstration that was clearly simulated, Bill Gates returned to the stage toward the end to show a Microsoft Research device that's capable of discerning both objects and people by their appearance. A person wandering the streets of Las Vegas could point this test device toward, say, a casino and get an identification of what it is. (Of course, he could also read the neon sign.)

Embedded in that identification can be an inline ad -- in this example, a little movie clip embedded in the marquee of the casino the device took a picture of. It was also worth noting that the device could identify the object based on its simulated projection on the wall.

Later, the same device could be used to search through a database of videos, presumably stored someplace in "the cloud," that had some contextual relationship to a given subject. In this case, Bill Gates and Robbie Bach were able to pull up Gates' guest appearances on late-night talk shows.

Sharon Fisher: So where is this video? In his phone? Or somewhere else?

Scott Fulton: It's in the cloud!

Sharon Fisher: I mean, this is cool, but it would depend a lot on how it would know [what it's supposed to relate to], and how much a) configuration and b) memory it would take up.