Also discussed was Windows Live Essentials, a set of hosted productivity applications, is now out of beta and available for broad use. Live Essentials includes applications like Windows Live Messenger, Live Mail, Live Writer and Live Photo Gallery.
In addition, a new deal with Facebook will include its status updates with the other social-networking applications on the Windows Live home page, which Microsoft is trying to make a hub for Internet users.
The partnerships with Dell, Verizon and Facebook are significant for Microsoft as it tries to compete better with Google, Rosoff said. "For Live Search in particular, it's an important way to get these services out to more people," he said.
Robbie Bach, head of Microsoft's entertainment division, touted strong sales of Microsoft's Xbox 360 and say there are now 17 million active members on Xbox live. He also updated the audience on the progress of the Microsoft Zune.
He called the Xbox Live "a showcase" for connected social entertainment.
Bach also discussed an easy-to-use game construction kit, called Kodu, that will allow every-day Xbox users to design their own games. Due in March, it will let people trade these games with other Xbox users, but not sell them for money. Bach invited a 12-year-old programmer named Sparrow to demo and edit her game live.
New Halo Games
Bach also unveiled two new games in Microsoft's hugely popular Halo franchise, including Halo Wars, the first Halo game rated for a teen audience. It's available starting Feb. 28. A download will be available Feb. 5.
A new adult game, Halo 3 ODST, will launch later this year, he said.