Gates and Ballmer at D: Lament for lost youth

I’m keeping my head down in my book writing, mostly, this year, but I allowed myself one trip to one industry event, so here I am at Walt Mossberg’s and Kara Swisher’s D conference again. New owner (who’ll be here tomorrow); same friendly proprietors.

Things kicked off tonight with a double interview with Bill Gates and Steve Ballmer. After last year’s psychodramatically rich confrontation between Gates and the other Steve in his life, this event was decidedly more tepid. Gates has had one foot out the door of his company for a long time, of course, but as he prepares to depart fully from active duty next month, he might have figured on taking something of a victory lap here.

No such luck. Mossberg, inconveniently, kept bringing up the Vista fiasco. Gates wryly commented, “We have a culture that’s very much about, ‘We need to do it better,’ and Vista’s given us a lot of opportunity for that.”

Ballmer predicted a release of “Windows 7″ — the successor to Vista — by late 2009. (Danger, Will Robinson! Remember the Longhorn slippages! Haven’t they learned?) There was a suggestion that we might get a look at the new Windows 7 interface here; but what was actually on display was some neat tricks involving multitouch interfaces for applications –a la the iPhone’s pinch-and-tap approach to using more than one point of contact on a touch screen to manipulate stuff. (The demo included an onscreen piano keyboard, but nobody actually tried to play a chord, which I’d have thought would be the obvious way to show off multitouch.) All this was neat enough, but not much to go on — and unless Windows 7 fixes a lot of Vista’s problems there will be a dwindling base of users to experience its neat touches.

Ballmer declared, unconvincingly, that he’s not stewing over the collapse of his attempt to acquire Yahoo: “I’m not frustrated at all. They’re great guys, they built a great company. We couldn’t agree on a price.” As he spoke, a blown-up Wall-Street-Journal woodcut portrait of Jerry Yang stared down at him from the wall. (Yang will be here tomorrow.)

Both Gates and Ballmer remained almost pathologically unable to utter the syllables “Google.” Ballmer attempted to explain how he sees Microsoft responding to the Google challenge: “You need scale, and business innovation, and technological innovation. You need breakthrough innovation and incremental innovation. You need it in search and in advertising. You need to bring it all together. And you need it at all levels of the stack.”

Whenever I hear a CEO say, “We need to do it all!” I translate: “We really don’t know what the hell to do here.”

Gates and Ballmer seemed most comfortable, and genuine, in reminiscing about their youth, as Harvard friends and then as partners in building Microsoft from the ground up. Are their best days behind them? They would never admit it, but no matter how brave a face they put on, or how rosily they paint Microsoft’s prospects, I think that on some level even they sense it.

AllThingsD’s John Paczkowski did the live-blogging thing here. No doubt there will be video up soon too.

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