“We’ve had a great response here in Japan,” Ballmer said. “Certainly we’ve seen initial sales be fantastic. The first ten days were bigger than the first ten days of XP or Vista or any other Windows launch that we have done.”

And indeed that would seem to be the case. According to research outfit NPD, Microsoft (MSFT) sales of Windows 7 in its first few days on the market were more than triple Vista sales for the same length of time.

BoomTown’s week began onstage in front of thousands of chanting women. No, Kara wasn’t filling in for Oprah; she was doing something much cooler. She got snagged to moderate a panel entitled “Changing the World Through the Web” at Maria Shriver’s six-year-strong Women’s Conference. Kara’s panel included a group of VIPs from Facebook, Kiva, Blue State Digital–and the Twitterific Ashton Kutcher. With “Mission: Kutcher” accomplished, Kara followed up with the complicated world of MicroHoo and offered analysis on the still-pending search deal. Moral of the story: Commentators should give it time, and Carol Bartz should quit with the Jerry Yang jabs. BoomTown rounded out the week at TEDMED. The conference covered the scalpel’s edge of med tech. And yes, in case you were wondering, synthetic skin feels gross.

Digital Daily covered the real-time search war early in the week when Microsoft’s Bing search folks announced a nonexclusive deal with Twitter to feed on its data stream. The deal did put Bing out front for once, but no one knows if the new info source will turn into profits for either search group. In a post foreshadowing a grisly murder, John reported results from a ChangeWave research study that placed the iPhone within striking distance of overtaking the Blackberry from Research in Motion (RIMM) in the smart-phone market. Okay, maybe it wasn’t that grisly, but it’s Halloween. Digital Daily rounded out the week by adding the iPhone to the pantheon of cat, dragon, rat and rooster that occupies the rim of your Chinese restaurant placemat. Apple’s (AAPL) iPhone officially made it to China this week, though without its signature Wi-Fi, and at a much heftier price point.

Peter Kafka lives at the crossroads of media and tech, and that’s exactly where he was almost run down by the Windows 7 “Family Guy” episode. Microsoft (MSFT) apparently bailed out of the deal when it took a closer look at what was actually inside. From the “not so fast” files, Peter covered a report from Interpublic Group (IPG) noting that ad revenue isn’t quite as sunny as some have suggested. Grim economic times caught up to AllThingsD’s big brother late in the week when The Wall Street Journal closed its Boston bureau. The move resulted in nine job losses, despite significant resources being poured into the paper by parent News Corp. (NWS).

The leaves are changing color over at Personal Technology, and Walt sensed that chill in the air meant it was time for his annual fall computer-buying guide. Operating-system choice was a big discussion; but he also touched on the latest must-haves in the memory, graphics, processor and form-factor categories. With a cup of Earl Grey tea to fend off the autumn chill, Walt trudged out to Mossberg’s Mailbox this week and came back with a fistful of letters. He dutifully replied to a question about migrating Microsoft files to a Mac running windows, offered clarification on the Windows 7 upgrade process, and weighed in on the rumor of a pending Apple device below a laptop but above an iPhone.

Katie finished it all off with a deep dive on the two latest netbooks. The HP (HP) Mini 31 and the Nokia (NOK) Booklet 3G both offer high style compared with their competitors, and each boast much higher screen resolutions than previous models. Though she came down on the side of the Nokia, Katie remarked that neither option would disappoint.

Bundle up as you head out for tricking and treating, and learn from Weekend Update’s mistakes. Remember to check and make sure that scary face is actually a mask before you bring that new friend home.

Wednesday morning, Boomtown opened with the exclusive confirmation we’d all been waiting for: Microsoft’s Bing search engine had inked deals with Twitter and Facebook. The age of real-time is upon us. As if the world weren’t complicated enough, Microsoft (MSFT) opened its own Apple stor… er, Microsoft stores to challenge Apple’s (APPL) retail success. Kara went in like lion and out like Carl Icahn this week with a Friday profile of the mogul. Icahn, activist investor and owner of the world’s best name to precede “haz cheezburger,” quietly left Yahoo’s board this week waving a flag of defeat at CEO Carol Bartz.

Digital Daily took a hard look through the Windows this week. John covered the Microsoft’s release of the new leaner, meaner Windows 7. John’s conclusion: Microsoft’s lucky number could be seven, even if that’s just because it’s anything but Vista. Hopefully they programmed this one with 20 percent more customer goodwill. John reminded us this week that you never can tell what John McCain is going to do next, unless you follow the money. Maverick McCain introduced a bill to prohibit the Federal Communication Commission from implementing the Net neutrality rules it released in recent weeks. Digital Daily wasn’t too surprised to see Sen. McCain take the bold position, as it’s squarely in front of the same telecom industry that has been so generous to him in the past. To round things out, John covered a particularly interesting legal chess game/slap fight between Nokia and Apple. Nokia (NOK) may have sued Apple (AAPL) over cellphone patents, the analysts say, as a way to fend off possible suits in the other direction over Nokia’s multitouch assets.

MediaMemo makes sense of that crazy New York state of mind. That clarity was more valuable than ever this week when Demand Media got in our faces. Peter explained Demand’s model for flooding the net with cheap news stories designed to maximize clicks and add revenue. We’ll have to see how the “content by the numbers” game plays out. In the latest installment of the Condé Nast saga, Peter brought news of a new attempt to grab some of those new media dollars. GQ Magazine will offer its December issue in an iPhone version. This move comes during a round of downsizing all over the Condé empire. While Condé Nast’s strategy seems to be to get users to pay for something they couldn’t get before, it appears that Hulu plans to ask users to pay for something they can currently get for free. Hulu doesn’t know how it will happen yet, but the video service is looking for a way to begin monetizing its vast collection of movies and TV shows. If the company goes with “Hulu Plus” as a subscription option, maybe Peter will get a nod to the naming rights.

Walt spent his column inches this week on the evolution of the Mac. Midweek, Apple released refreshed versions of the iMac and MacBook, as well as the new Magic Mouse. All signs seemed positive with the new products, which feature updates like a larger screen option for the iMac and a rounder, more lovable case for the white plastic MacBook. When Walt went out to check the mail, Mossberg’s Mailbox was again full of Windows 7 questions. Walt discussed some of the new low-vision features in Windows 7, explained the admittedly complicated price points and told readers where to download the operating system.

Katie brought a sparkle to the week with a review of Goby, the self-proclaimed search engine of fun. While she was impressed by the concept, she spotted some gaping holes in search returns, like hundreds of missing events she knew to be on the calendar and others that had already come and gone. Goby might be a great idea, but Katie won’t be relying on it until things like accuracy and timeliness are better addressed.

Weekend Update can make two promises for what’s coming next. First: If it is happening in tech, you will find it at AllThingsDigital. Second: Weekend Update promises to keep the ghost puns to a minimum in the next edition.

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

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

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

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

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

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

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

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

Microsoft Reports First-Quarter Results

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

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

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

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

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

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

Business Outlook

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

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

With those words, spoken at a big company event in New York City (see video below), the Microsoft CEO launched the newest version of Windows, the one he hopes will regain the customer goodwill lost with its predecessor, Vista. There’s no question that the stakes are particularly high this time around. Vista was widely maligned as mediocre, and Microsoft (MSFT) needs something to reverse three quarters of declining Windows sales.

By most accounts, Windows 7 fits that bill. Reviews of the new operating system have been largely positive, calling it faster, more secure and easier to use that its predecessors. Our own Walt Mossberg describes it as “the best version of Windows Microsoft has produced…a boost to productivity and a pleasure to use.” Quite an endorsement, but one that was hard won. According to Microsoft, more than eight million people participated in the Windows 7 beta program–more than for any Microsoft beta program ever.

In any event, if any OS has a shot at succeeding Windows XP as the world’s most ubiquitous operating system, it’s Windows 7. “I think Windows 7 will be the biggest, one of the biggest, products to hit the tech industry this year,” Ballmer told CNBC. “Just because Windows is used on about one billion computers around the planet. There’ll be another 300 million machines that ship this year, and the diversity of PCs that ship with Windows 7, the simplicity that Windows 7 brings–I think it’s a pretty banner year.”

“On the new online Microsoft Store, we’ve added a bunch of new products, including Windows 7 PCs as well as select 3rd party software and accessories,” Trevin Chow, senior lead program manager for Microsoft Store, said in a blog post announcing the move. “And let’s not forget a ton of gaming products that have been added including a bunch of the top selling Xbox 360 titles.”

Interesting. Not exactly sure what the upside is to selling PCs online when you don’t make them. It’s not like Microsoft (MSFT) will be offering a better experience than, say, Best Buy (BBY), HP (HPQ) or Dell (DELL). And an online outlet doesn’t afford the company the same opportunity to cultivate the “Microsoft Experience” it’s clearly going for in its brick-and-mortar outlets. So why bother?

A unified experience online and off, I suppose. And, if the infrastructure is in place to sell through one channel, why not sell through both? Of course, the downside is that if you don’t execute well, you risk giving customers another lousy experience with which to associate your products.

“The launch of Windows 7 has exceeded everyone’s expectations, storming ahead of Harry Potter and the Deathly Hallows as the biggest grossing pre-order product of all time at Amazon.co.uk,” Amazon’s Brian McBride told the Telegraph. “Demand is still going strong. Over the past three months, only Dan Brown’s The Lost Symbol has sold more copies than Windows 7, which is an incredible achievement for a software product.”

And an incredible achievement for Microsoft (MSFT), especially after that monument to disappointment, Windows Vista. Seems those early discounts and launch parties paid off. Well, maybe not the launch parties.

Kara and the Boomtown blog were in New York this week and started the party early with Bob Pittman–well known media and Web exec. Kara wasn’t dancing on the tables, but did admit that Pittman’s new venture, a top-shelf tequila, was plenty tasty. BoomTown went straight from the sauce to the nose candy in a short interview with Ford’s (F) social media guru, Scott Monty. While Monty might have been using cocaine as a metaphor for a new kind of marketing that changes consumption of all other marketing, Weekend Update gets his subtext. As if BoomTown didn’t have enough hardcore “cred,” Kara headed off to fabulous Las Vegas for the annual meeting of the blogs at BlogWorld. Nothing that happens in Vegas this weekend will stay there–not with thousands of bloggers roaming the Strip in search of a new meme to latch on to.

Digital Daily trapped a Snow Leopard early in the week. John reported on Apple’s (APPL) admission that the Snow Leopard version of OS X occasionally overdelivers on its promise to free-up disk space. In certain circumstances, the furry filcher can sneak in and make off with all your user data. If it was data loss you were looking for though, no one beats the good folks at Danger who, up until recently, housed all kinds of personal data associated with the Sidekick line of smart phones. The Microsoft (MSFT) subsidiary permanently lost contact, calendar and other personal data associated with many accounts. Weekend Update thinks that Sidekick users were given fair warning, though; the company name is, after all, Danger. John rounded out the week with something unusual–good economic news from the tech sector: Intel (INTC), Google (GOOG), IBM (IBM) and AMD (AMD) were all feeling a little more flush than their prognosticators had predicted, each beating their admittedly dismal forecasts by at least a little.

MediaMemo followed up on some important stories, beginning the week with Twitter’s spam problem. Peter reported that the Web’s biggest microblogging pipeline updated its tools for trapping the flotsam and jetsam. Twitter is reportedly in talks with several leading search engines that want to feed on all that delicious real-time data. Peter also updated the readers on the tough times over at Condé Nast. This round of cuts was a little closer to the magazine publisher’s crown jewels than last week’s cuts and closings, with the layoff of at least six staffers from Vogue. Peter closed out the week with a cheeky little open letter to the Federal Trade Commission. He asked some important questions regarding the FTC’s recent obsession with bloggers and disclosure. He seems to think that most serious bloggers don’t like to sell their credibility for tiny discounts to obscure events.

Walt and Katie were all over Windows 7 this week, with help on all fronts for those making “the switch.” Before he got to that, though, Walt spent some personal tech time with some supersmart phones. He elevated Motorola’s (MOT) CLIQ and RIM’s (RIMM) BlackBerry Storm2 to the level of potential iPhone killer and praised their updated features and power as mobile computers rather than simply phones. Mossberg’s Mailbox heralded the beginning of the Windows 7 flood and was chock full of questions about upgrading and replacing some of the functionality that was built into Vista. The Great One also offered thoughts on installing Windows 7 on a virtual machine running in OS X, but couldn’t speak to the boot camp option until Apple releases more info…and the proper drivers.

Katie tested PC Mover from LapLink as an all-in-one option for moving precious data to Windows 7. While she praised the $15 program’s efficiency, she thought it was a little sleazy that it also tried to get her to purchase other programs while it had her data in its clutches. All went well, and the moral of the story is that this one-trick pony upgrade assistant was worth the minimal price tag.

Breaking News: Weekend Update is getting intermittent reports that Kara may have been kidnapped from BlogWorld by a roving band of mommybloggers in white robes, all slowly chanting “mon-eh-tize” as they piled into their Honda minivans. They may or may not have sealed her into a 30 foot-wide, saucer-shaped balloon, which could be floating westward toward the Bay Area.

If we get her back, you can look forward to another fully staffed, fully loaded week at AllThingsD.

This time it’s going to be different. That’s because Microsoft (MSFT) is paying to make it so. The company has teamed up with Fox to sponsor a “Family Guy” special built around Windows 7. The show, dubbed “Family Guy Presents: Seth & Alex’s Almost Live Comedy Show,” after creator Seth MacFarlane and voice talent Alex Borstein, will air Sunday, Nov. 8, at 8:30 pm, EST and PST.

The new episode will be free of commercial breaks but presumably rife with “clever” references to Windows. Microsoft agencies Universal McCann and Crispin, Porter and Bogusky, which were tapped to weave the company’s marketing messages into the program, will make sure of that.

“You’ll see us deeply integrated into the content,” Gayle Troberman, general manager of consumer engagement and advertising at Microsoft, told Ad Age. “You’ll hear a lot about how Windows 7 can help you simplify your PC–it’s simple, fast and easy to use.”

Sounds…hysterical.

Incidentally, it’s worth noting that this isn’t the first time MacFarlane has inked an advertising deal with a tech company. He’s currently working with Google (GOOG) on a project called “Seth MacFarlane’s Cavalcade of Cartoon Comedy,” which involves humorous animated shorts with built-in advertisements syndicated through the search giant’s AdSense advertising system.