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With Gates Away, Ballmer Takes The Stage

Microsoft is on track to distribute the first "release candidate" of Windows Vista by the end of September. RC1 will replace the current beta 2 for companies evaluating the forthcoming operating system.

Microsoft plans to leverage Vista and the upcoming Office 2007 suite to sell add-on products, said CEO Steve Ballmer, speaking at Microsoft's annual meeting with financial analysts in Redmond, Wash. Vista and Office 2007 "are the engines, not just of short-term revenue growth," Ballmer said.

Ballmer opened the meeting in place of chairman Bill Gates, who traditionally kicks off the conference. Gates, who disclosed last month that he would leave his daily role at the company in two years, was vacationing in Africa. Since Gates relinquished many of his technical duties last month, Ballmer said he's taken on a new, unaccustomed role as "the primary champion of innovation in the company.

Microsoft is trying to get faster growth out of its desktop software business, gain market share in Internet advertising, and make entertainment products such as Xbox and the upcoming Zune digital music player another "pillar" of the company's business, Ballmer said.

In addition, Microsoft is branching into new vertical markets, such as health care. On Wednesday, it acquired clinical software called Azyxxi and much of the team that created it from a Washington, D.C. hospital for undisclosed terms. The software collects and displays documents and medical images from a variety of computer systems to help doctors view information more quickly.

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