Video: Multi-Touch in Windows 7

At Dow Jones' D Conference in Carlsbad, Calif., last night, Bill Gates and Steve Ballmer gave a revealing and entertaining interview to the Wall Street Journal's Walt Mossberg and Kara Swisher.

The tag team that helped found Microsoft and made real what was once an absurd idea -- that one day everyone would have a computer -- talked expansively of their shared history, their working relationship, and some of Microsoft's recent successes and failures.

I've posted two highlight clips below; they're worth watching in full. In particular, though, there are a couple of great bits in the second clip, one regarding Microsoft's pursuit of Yahoo, and the other about Windows Vista, the company's latest and not-very-much-loved operating system.

Regarding Yahoo, CEO Ballmer, maestro of the white board, describes how winning in the online advertising business requires huge "scale." Microsoft's aim, in pursuing Yahoo, was to buy that scale -- to buy Yahoo's share of the search-engine market -- because as the business currently stands, one company threatens to take over the whole game. That company -- whose name Ballmer jokingly finds hard to say -- is Google.

"Otherwise over time all the ads for the Wall Street Journal online will be sold by one guy" -- i.e., Google -- "and they'll tell you exactly how much your editorial is worth," Ballmer warns.

"Yeah, like a monopoly," Swisher says, to much laughter in the audience.

Ballmer, laughing, responds, "Am I saying there's something wrong [with monopolies]? I'm just saying, we are guys who will compete."

A few minutes later, Walt Mossberg asks, "Is Vista a failure? Is it a mistake?" He follows up with several different questions to that effect, including, "C'mon, you can't be happy with the way this Vista thing has gone."

"Vista's not a failure and it's not a mistake," Ballmer says. "Are there things that we will modify and continue to improve going forward? Sure. With 20-20 hindsight are there things we would do differently? Undoubtedly there are."

Gates says that none of the company's products are perfect: "That's part of the magic of software -- people give you feedback on what they like ... and you get to do a new version. We have a culture that's very much about, 'We need to do better.'"

Then Gates adds: "Vista's given us more opportunities to exercise our culture than some products that we've shipped." (Gates is self-deprecating and disarmingly charming, isn't he?)

So that's Microsoft's answer on Vista: We'll do better. And it's a nice attitude, one that encompasses the company's ethos -- when you fail, keep trying, eventually you'll win.

But why do Microsoft's efforts always look so ... last year? We saw a classic demonstration of that in the interview when Gates and Ballmer showed off some pieces of the upcoming version of Windows, the successor to Windows Vista.

The system will have a redesigned user interface, one that borrows technology from the Surface computer that Microsoft unveiled at the D Conference last year.

Every part of the operating system will be touch-enabled -- that is, it'll respond to your fingers. To move a photograph on the screen, you'd press it with your digit, then drag it across the screen. You can resize the picture with two fingers, pulling them apart to increase the size, pinching them to reduce the size. And say you want to scroll through a list of photos? Simply flick the list, and it glides up and down.

Maybe you don't get what I mean -- if not, watch the video, posted above, that Microsoft put out.

Spectacular, isn't it? To think that such an advanced touch-interface will be available in a consumer product, and soon too -- Windows 7's release date being late 2009 or early 2010.

It's almost too hard to wait. If only there was something just like this that you could get your hands on right now -- an OS in which you used a couple fingers to resize and move the images on the screen, in which a simple flick of the finger sent a list scrolling up and down.

Oh, what's that? An I-what? A phone? iPhone? Apple? You mean, the iPod company? Oh, interesting. It too resizes things with your fingers? Flick to scroll? Huh, that's fascinating. I guess great minds just think alike. So when's this thing coming out, next year too? Oh, last year? What, version 2.0 is almost out? Oh, wow.

So, seriously, when asked about this -- Mossberg pointed out that Apple will likely release its next Mac OS before Microsoft puts out version 7 -- Ballmer stuck to the numbers: "We sell 270 millions PCs a year, and Apple sells 10 million. They're fantastically successful, and so are we."

Here are two clips from the event, courtesy of the folks at the D Conference.

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One more video: I discussed Windows 7 for my weekly Current TV spot.