“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.

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.”

And so the company today said that beginning Friday, “select markets” can preorder Windows 7 at a more than 50 percent discount. In the U.S., that means Windows 7 Home Premium will set you back about $50, or Windows 7 Professional about $100. A “screaming deal,” Microsoft calls it.

The promotion runs until July 11 in the U.S. and Canada and until July 5 in Japan, or “while supplies last.” If you choose not to preorder an upgrade copy, you’ll obviously pay a bit more for Windows 7 when it finally ships on Oct. 22. Existing XP and Vista customers in the U.S. will be able to purchase Home Premium for $119.99, Professional for $199.99 and Ultimate for $219.99. New customers will pay $199.99 for Home Premium, $299.99 for Professional and $319.99 for Ultimate.

Pricey, but about 8 to 17 percent less than Vista. Said Brandon LeBlanc, Microsoft’s in-house Windows blogger, “Overall, customers will be paying less and getting more with Windows 7.”

For their sake, let’s hope so. Especially if they paid retail for Vista.

Though Windows 7 is expected at market by the end of the year, the United States military has set that as a deadline for its migration from Windows XP to the “worthy, but largely unexciting” Windows Vista and from Office 2003 to Office 2007.

The Army has been testing Vista since 2006 and its decision to move forward with a migration of its 744,000 desktops–on both classified and unclassified networks–was apparently driven by the OS’s improved security. “First, they see real value in Windows Vista’s improved security architecture,” Microsoft senior director Gavriella Schuster said in a statement. “Second, it shows large organizations have unique needs and timetables for deployment. These things take time–they have been rigorously testing internally–and it makes sense that they have approached deployment in a measured and well-planned way, especially given the number of seats they are migrating to Windows Vista.”

Now that the marketplace has abandoned Vista, is Microsoft making preparations to abandon it as well? Earlier today, a Microsoft executive suggested that might be the case, hinting that the company could be planning to ditch Vista soon after Windows 7 ships. “We are still not sure if [computer makers] will be able to ship Vista once Windows 7 is made available,” Richard Francis, general manager and Windows Client Business Group lead at Microsoft Asia-Pacific, told IDG, adding that support for all versions of Vista will end in April of 2012.

An interesting disclosure given that Microsoft (MSFT) hasn’t yet detailed official plans for Vista, post-Windows 7. With the poor reception the OS has received in the market and Microsoft’s efforts to redeem itself with Windows 7, it certainly wouldn’t be surprising if the company wanted to remove Vista from the shelves as soon as Windows 7 arrives. Then again, it wouldn’t be all that surprising if Microsoft left the Vista packages there for a while–tucked away behind some copies of Windows XP, of course.

UPDATE: Responding to my request for comment, Microsoft said that there is no hard and fast date end-of-sale date for Vista. The company noted, however, that OEMs will have the option to pre-install and retailers will be able to sell whatever versions of Windows they choose until that date is reached. Microsoft’s statement in full, below:

We have not made any final end of sale decisions for Windows Vista.

Microsoft Support Lifecycle policy provides a minimum of 10 years of support for Business and Developer products. Mainstream support for these business and enterprise versions of Windows Vista will be provided for five years, or for two years after the successor product is released, whichever is longer. Currently, Mainstream Support for these products is scheduled to end on April 10, 2012.

For Consumer products, including consumer versions of Windows Vista Ultimate, Home Basic and Home Premium, Microsoft will offer Mainstream Support for either a minimum of five years from the date of a product’s general availability, or for two years after the successor product is released, whichever is longer. Extended Support is not available for Consumer, Hardware, and Multimedia products. Most of these products will also receive at least eight years of online self-help support.

During Mainstream Support, customers have access to no charge and paid support, security updates and non-security hotfixes. Extended Support for business and developer products will be available until April 11, 2017. During Extended Support at a supported service pack level, customers can access paid support, security updates and online self-help. Non-security hotfixes are available to customers who enroll in the Extended Hotfix Support program within 90 days of the product entering Extended Support.

Rumor has it there are big games going on this weekend–at least one of which involves football players. The rest involve the usual players, though they might appear in different positions–and on different teams–from week to week. These games, most likely, will continue through Monday and beyond. Scores will be kept on an ongoing basis.

BoomTown wrote this week about a new game of tag taking Facebook by storm. Whether or not you’ve written a list of “25 Random Things” about yourself, you’ve likely read a few. BoomTown only gave up five, but they’re good ones. On defense, AOL announced it would lay off 10 percent of its workforce due to the overall ad meltdown; CEO Randy Falco’s memo to his troops is here. And whether or not AOL has buyer’s remorse over last year’s $850 million acquisition of Bebo, the company is not considering putting the social network up for sale.
BoomTown followed the tough love approach of Yahoo’s (YHOO) new CEO Carol Bartz, and liveblogged the company’s fourth-quarter earnings call, during which Bartz insisted (without mentioning Microsoft) that she wasn’t brought to Yahoo to sell the company. She also shared some canny-folksy wisdom–in the form of a chicken metaphor–about the value of the company as a whole, but it’s still a little early in the game to call that one. Of course, BoomTown had a few opinions about the unspoken Microsoft (MSFT) scenario.

Over at Digital Daily, there was a lot to be said about smartphones. Apple’s (AAPL) so-called “iPhone patent,” which would cover much of the Palm (PALM) Pre’s multitouch and gesture interface, has the potential to be a huge game changer in that race, if it’s upheld. And as if Palm doesn’t have enough to worry about, Sprint (S)–its exclusive carrier for the Pre–is rumored to be preparing to lay off 14 percent of its workforce in March, when the phone is expected to launch. Elsewhere in that contest, it turns out that Research in Motion’s (RIMM) BlackBerry Storm, which was largely panned by critics, is actually selling at a decent clip–one million so far in the U.S. No iPhone, but still, it could be worse. As Digital Daily noted, Dell (DELL) is said to be readying two phones to enter the market dominated by the iPhone, BlackBerry, and soon the Pre: one an iPhone-like Windows Mobile device, and the other a Pre-like Android device. Both could launch as soon as February, but greatness is not anticipated. Digital Daily also kept the tech job-cut score, which increased 74.2 percent from 2007 to 2008. Here’s a roundup of some of those affected.

MediaMemo had some interesting numbers to share: While Obama’s Inauguration was indeed a big day for Web video, it wasn’t as huge as some estimated. Exact numbers are impossible to measure, of course, but roughly 13 million people watched the ceremony online, while roughly 38 million watched on television. On an ongoing (and presumably growing) basis, though, numbers suggest that almost 20 percent of Netflix’s (NFLX) subscribers are using the company’s streaming service to watch movies online. That should increasingly morph back into the world of television as the company’s technology makes it simpler to stream directly to a set-linked device. In the world of print, things continue to look grim. Time Warner’s (TWX) Time Inc., in a standoff with its distributor, which upped its price by seven cents per magazine–has announced it will take its business elsewhere as of Feb. 1. If this is a game of chicken, it’s anybody’s guess who’ll win. And Time Inc.’s Ann Moore received a lifetime achievement award from the magazine industry’s trade group on Thursday. In her acceptance speech, she expressed her belief in the power of magazines and print advertising and her gratitude in the fact that she’s not in the newspaper business.

In Personal Technology this week, Walt Mossberg reviewed iLife ’09–specifically iPhoto, GarageBand and iMovie, with mixed results. In Mossberg’s Mailbox, it was all about Windows 7: Whether it requires new drivers, how it stacks up to XP, and how upgrades from XP and Vista compare with each another. Katherine Boehret reviewed the BlackBerry Curve 8900 in the Mossberg Solution, and liked it.

More next week.

Beyond that, there’s likely to be a fair bit of talk about the Windows Mobile platform, the company’s new–and prematurely announced–agreement to become the default search provider for Verizon Wireless (VZ) and perhaps provide some sort of Zune interface for cellphones, but little else.

The keynote begins a bit before its scheduled start–not with Steve Ballmer, but with two beat-boxers. Wonderful, they’re rapping about CES. Where’s Bill “Big Pimpin’” Gates, when you need him?

The performers leave and Consumer Electronics Association President Gary Shapiro takes the stage. He acknowledges it was a “tough 2008,” and after a few introductory remarks (”Steve received a perfect 800 on the math portion of the SATs!”), introduces Ballmer. But first a little video. As it plays, I notice my inbox filling up with a handful of Microsoft press releases: Microsoft’s Ballmer Announces Availability of Windows 7 Beta and Windows Live, Microsoft makes new, early version of Windows available, etc.

Ballmer takes the stage a few moments later, all high energy and charisma. He begins by recognizing Microsoft’s history at the event and, of course, that Bill Gates has keynoted a CES or two in his time. A brief aside about email messages he’s received about the event today. There’s one from Gates: “Steve make sure you’re at CES and not that other event in Las Vegas this week” (presumably the annual Adult Video News Award show). And one from Yahoo CEO Jerry Yang: “Steve why do you keep ignoring my friend requests on Facebook?” Then, on to an industry overview.

“Today our world, our nation and our industry face some really big challenges,” Ballmer says. “All of us, we’re all feeling it. And its impact will likely be with us for quite awhile. But no matter what happens with the economy or how long this recession lasts, I believe our digital lives will only continue to get richer.”

Companies that pursue innovation will do better than those that pull back, says Ballmer. “We will continue to invest more than others.”

Outlining the broader vision now. Microsoft’s original vision was to put a PC in every home–a single screen. Today, it’s about three screens. The PC, the mobile phone and the TV. And the barriers between these screens are slowly going away. They’re being connected by the cloud. This is the “last mile” for the consumer experience–bringing the TV, the PC and the mobile phone together through the cloud.

And at the center of this experience? Windows, of course.

“In the next couple of years the computer will be able to hear you,” says Ballmer. “Speech gestures and handwriting will become a normal part of the way we interact with our PCs, our phones and our TVs…. Windows has become the language that over a billion people speak around the world.”

Moving on to hardware now. “At this time economically, when people are struggling…the choice that offers the most power and most value for the money is the PC.”

Oh, we all know what’s coming now, don’t we?

Yep. “That’s why I’m a PC and I’m proud of it!”

Onward. “Microsoft is transforming Windows from a PC operating system to the cloud,” says Ballmer, who notes that he’s excited by the progress the company’s made with Windows 7. “It’s the best Windows ever,” he says. Faster boot times, touch support, etc. “We are on track to deliver the best version of Windows ever. We are putting in all the right ingredients…and working hard to get it right and to get it ready…. Windows 7 will make every day tasks faster and easier.” And then, as expected, Ballmer announces the official beta. Smattering of applause. No big surprise here. “I encourage you all to get out and download it,” Ballmer adds.

Moving on to Windows Live now. A handful of announcements. Windows Live Messenger, Windows Live Photo Gallery, and Windows Live Mail. A partnership with Facebook. And a distribution deal with Dell (DELL) and the Verizon Wireless search deal, which was unofficially announced earlier today.

Ballmer invites product manager Charlotte Johnson to the stage for a demo of Windows 7, etc. Apparently very easy to clear desktop clutter in the new OS. Easy to compare two documents or Web sites as well. If that’s Windows 7’s marquee feature, Microsoft is in big trouble. This is all stuff that was in the pre-beta. “Homegroup” feature seems a nice way to set up a home network. Course, all the PCs involved must be Windows 7 machines for it to work.

On to multi-touch. “We built touch into the DNA of Windows 7,” Johnson says. She uses a touchscreen to navigate a 3D map of Manhattan. Yawn. Very little new here. The same is true of the Windows Mobile demo. Big revelation: Internet Explorer 6 for mobile phones supports Flash. And the Windows Live home page can now display updates from Facebook, Twitter, etc…. No. Nothing much new here at all. Seems today’s big announcement is the official beta of Windows 7.

Oh, here’s something. A new feature in Messenger. Some sort of dynamic display picture to communicate user moods. Exciting. A bit more patter and we’re on to the obligatory “I’m a PC” ads.

And then…another band? An Australian musical comedy act called Tripod. WACKY. No Flight of the Conchords, though.

Tripod finishes up and Robbie Bach, president of Microsoft’s Entertainment & Devices Division, takes the stage. “Zune had a great year. We’ve won critics over,” he says–and without a trace of irony. Two million people on Zune social, apparently.

Moving on to Xbox. “Not only our best holiday season but our best year ever for Xbox sales.” Two new Halo games in the pipe–”Halo Wars” and “Halo 3 ODST.”

Then a few moments on Xbox Live Primetime and we’re on to Kodu, a tool that enables users to create games without knowing a traditional programming language. Bach invites a 12-year-old girl onstage to demo it. She shows off a game she created and then beats Bach at it.

Ballmer returns to the stage for some Microsoft Research demos. First, some sort of digital anatomy textbook. Five bucks and a copy of Bill Gates’s “The Road Ahead” says we’ll get another Surface demo next.

And indeed we do. That’s followed by flexible color display less than one millimeter thick. And that’s pretty much it. A few final remarks from Ballmer and Shapiro and then Tripod closes out the keynote.

XP will hit an end-of-life. We have announced one. If customer feedback varies, we can always wake up smarter, but right now we have a plan for end-of-life for new XP shipments.”

–Microsoft CEO Steve Ballmer, April 24, 2008

Looks like Microsoft (MSFT) CEO Steve Ballmer woke up smarter again.

Microsoft had planned to cut off sales of its Windows XP operating system through the retail and original equipment manufacturer channels on Jan. 30, 2008–one year after the Windows Vista debut. But the poor reception given Vista and the unwavering loyalty of XP users caused the company to extend that deadline to June 30, 2008. A few months later, Microsoft extended the deadline further, to Jan. 31, 2009. And now, amid reports that more than a third of all new Vista PCs are being downgraded to XP, it extended the XP deadline again.

Microsoft (MSFT) will now stop distributing Windows XP to PC makers on May 30, 2009. ChannelWeb reports that while distributors must place their final orders for XP OEM licenses by Jan. 31, 2009, they can take delivery against those orders through May 30. And the company will continue to support the OS with security and other critical updates until April 2014 (that’s 13 years after XP was first released).

Which means it’s now not only possible to hang on to Windows XP long enough to upgrade directly to Windows 7 in 2010, but entirely realistic.

The success of Windows is our number one job. With SP1 and the work we’ve done with PC manufacturers and our software ecosystem, we’ve addressed device and application compatibility issues in Windows Vista. Now it’s time to tell our story. In the weeks ahead, we’ll launch a campaign to address any lingering doubts our customers may have about Windows Vista. And later this year, you’ll see a more comprehensive effort to redefine the meaning and value of Windows for our customers.”

– Microsoft CEO Steve Ballmer, July 23, 2008

Microsoft’s new ad campaign–the one designed to “address any lingering doubts the company’s customers may have about Windows Vista”– doesn’t seem to be doing the company much good. According to that ChangeWave survey I mentioned in an earlier post, 48 percent of respondents said they prefer Windows XP to Vista. Just 33 percent said they prefer Vista.

A dismal showing for Microsoft’s (MSFT) next-generation OS, more so when you consider that fewer respondents prefer Vista this year than last. ChangeWave’s 2007 survey showed 42 percent favoring Windows Vista and 40 percent favoring XP.

What was it Apple (AAPL) COO Tim Cook said at the company’s recent MacBook event?

I think it’s fair to say that Vista hasn’t lived up to everything that Microsoft hoped it would. And consequently, it’s opened doors for a lot of people to consider switching to the Mac. And Apple has been the beneficiary of this.”

Windows Vista is a good product. The quiet majority of millions and millions of Windows Vista users out there are going to have a great experience. The message is ‘Move to Vista. The time of worry is over.’”

– Brad Brooks, corporate vice president of Windows Consumer Product, explains Microsoft’s decision to support XP until Windows 7 arrives at market in 2011.

Microsoft (MSFT) has extended the availability of Windows XP nearly as many times as it has extended the ship dates of Windows Vista and Office 2007. The company had planned to cut off XP sales through the retail and original equipment manufacturer channels on Jan. 30, 2008, one year after Vista’s debut. But the poor reception given the new OS and “feedback” from XP advocates gave it pause to reconsider. So Microsoft adjusted the deadline to June 30.

Which makes today XP’s last on the retail market. From now on, if you want to run Windows XP on a new machine, you’ll need to purchase Windows Vista and then “downgrade” to its predecessor, which Microsoft will continue to support until 2014.