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Office System Developer Conference A "brilliant, powerful - and let's face it, sexy and good looking - leader of men and women who just doesn't believe in paying more than seven dollars for a haircut".

That's the way Brian Williams, respected news anchorman for America's NBC, described Bill Gates in a video spoof on the Microsoft chairman's pending semi-retirement.

The star-studded video was shown during Gates's opening keynote at Microsoft's first Office System Developer Conference, in San Jose, California. The good news? These endless portrayals of Gates as a cuddly, self-effacing geek are likely to be fewer and further between as his role shifts from full- to part-time Microsoft employee.

Gates, though, didn't seem like an executive ready to retire as he took the stage to promote Microsoft's ubiquitous Office suite - and sole star performer of the Windows Vista desktop - as a software development platform, and also gave some insight into the thinking behind Microsoft's $45bn bid for Yahoo!.

"Making Office into a platform is very important to us," Gates said. "Our investment in the Office platform is greater today than it's ever been."

At the heart of Microsoft's strategy to promote the Office suite as a software development platform is the concept of the Office Business Application (OBA). OBAs combine the productivity suite with enterprise business processes and data.

Gates made several announcements, including the winter 2008 release (version 2) of the Office Live Small Business service. Gates claimed more than 600,000 subscribers to the service since it debuted last year. The company is offering a basic version for free with users paying for additional services.

Microsoft also announced an OBA Composition Toolkit, a reference application that uses Office and SharePoint Server 2007 to "enable the creation of enterprise mashups using pre-built components", and a new OBA Sample Application Kit for PeopleSoft and SAP. The OBA Sample kit provides tools for the rapid development of enterprise-grade business software that is connected to Office. Gates also touted Visual Studio Extensions for Windows SharePoint Server 1.1.

Ok, ok. Office is nice and everything, but why buy Yahoo!, whose corporate HQ is just down the road? As Gates spoke, Yahoo!'s management rejected Microsoft's hostile offer, a move that's apparently designed to strap the underperforming Yahoo! engine to the becalmed MSN barge and to somehow overtake the Google supertanker.

Gates responded during a rare question and answer session. Opening with a backhanded complement, Gates claimed only the two companies combined could convert Yahoo's engineering prowess into online ads revenue.

"Yahoo has done great work. I particularly point to the engineering work they've done... they did good work," he said (note the repeated emphasis on past tense). "But in an ad model, you need scale. And it's a tricky question of whether only one company has that scale."

Note to Bill: Google is just a single company, so therefore it must be a question of "who" rather than "what" type of single company you are.

Obviously, Gates was recalling Microsoft's solo $5bn plus spend so-far on R&D and entertainment content along with ads-related acquisitions since 2006, that's barely moved Microsoft's online needle against Google.

"There is a strategy where you drive toward being a media company and you take functions and you give up the engineering to someone else. We don't believe in that. The core is going to be engineering, and you've got to get it into a level of scale so that you can go and challenge to become the number one in that space." ®

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