Microsoft Readies Windows 7; Wins Search Deals

By Jessica Mintz

LAS VEGAS -- Microsoft's (MSFT) next version of the Windows operating system is almost ready for prime time, said CEO Steve Ballmer on the eve of the official opening of the Consumer Electronics Show.

The world's largest software maker also disclosed deals to make its Live Search programs the default search engines on more personal computers and mobile phones. And it announced a new version of its Ford Sync in-car technology that folds in the voice-operated directory service TellMe, which Microsoft bought in 2007.

Ballmer announced that a nearly final "beta" test version of Windows 7 will be available Friday for regular PC users to download and tinker with.

The new operating system -- which could be available for purchase on PCs within a year -- uses much of the same underlying technology as its predecessor, the much-maligned Vista. But Windows 7 aims to resolve many problems PC users had with Vista. For instance, Microsoft pledges to make it easier to install peripheral devices and to have the software pump out fewer annoying warnings and notifications.

Ballmer also pledged that Windows 7 will boot faster and drain laptop batteries more slowly.

"I believe Windows will remain at the center of people's technological solar system," Ballmer said. "We're putting in all the right ingredients: simplicity, reliability and speed, and we're working hard to get it right and to get it ready."

Ballmer is hoping to boost the number of people using Microsoft's Live Search engine, which ranks well behind Google (GOOG) and Yahoo! (YHOO) in popularity, through a deal with PC maker Dell (DELL). Dell will put a special Live Search browser toolbar and Windows Live programs, including Microsoft's e-mail and instant-messaging applications, on most of the consumer and small-business PCs that it sells worldwide. That deal replaces a relationship between Dell and Google.

The CEO also announced Microsoft has formed a five-year partnership with Verizon Wireless , a unit of Verizon Communications (VZ) and Vodafone(VOD) that calls for the Live Search tools to be added to all Verizon cell phones in the U.S. that can access the Internet.

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