Let's face it, the Internet was designed for the PC. The Internet is not designed for the iPhone. That's why they've got 75,000 applications - they're all trying to make the Internet look decent on the iPhone.

Only trouble is that I don't know how those fart apps are making the Internet look decent. [AP via Business Insider]

AMD said they expect less of an increase in Q4 revenues due to "the big build we've seen of PCs in anticipation of the Win 7 launch." Read: most PC makers aren't going to be ordering too many components from AMD for a little while. Apparently that comment has led investors to think this is an industry-wide phenomenon, that PC makers have all the inventory they need and more.

Without knowing how widespread the effect is, let's assume there are a ton of PCs out there. In that case, what will likely happen is the manufacturers will just sit on their inventory longer, and component suppliers will receive fewer orders. Hopefully, though, they'll feel the need to turn around that inventory quickly, which would mean some awesome deals could be on the horizon. [All Things Digital]

Image via Jfaneves

But analysts were well aware of Microsoft's cage of not-quite-released hardware and software, and their revenue estimates were still more than a billion dollars long. Months that were supposed to see $14.3bn pass through the company's accounts ended with just $13.1bn, which is a full 17% down from the same quarter last year. That globbed onto an also-tough Q3 to round out their financial year with a 3% decline in revenue overall—the first time they've seen a yearly decline in company history.

A section-by-section breakdown bears out the "give 'em some time" theory: Entertainment (Xbox and Zune), client software (Windows and Office) and mobile software lagged, suffering a sort of lame duck lethargy as they waited for their respective next generation products. That, and the fact that everyone in the world is kinda poor right now, and therefore not buying quite as many copies of Songsmith, et al.

So what did do well? No wait, first answer this: What has Microsoft actually launched in the last few months? Online revenues actually exceeded expectations, albeit by a small percentage. Way to go, Bing!

Worst of all, if it's the fact that a lot of Microsoft's products are in hospice care that's behind the poor showing, next quarter might not be much better: the company's got plenty of Things That Make Money on the horizon, but most of it's not gonna land in time to save this story from repeating itself in a few months. October 11th can't come fast enough. [Business Insider, Techflash—p.s. Erm, hey Bill!]

If Google's Eric Schmidt doesn't up the ante and throw a table, maybe Ballmer was right in calling him a pussy. [Techcrunch]

In what's a very awkward ending to what seemed like a relatively calm interview, Ballmer bolts up goes into a crazy shout-fest, trying to excite the audience. Other than the fact that this should have been done at the start of the interview, the whole thing just seems inappropriate for the venue he's at. The best part is the end, where it seems like (the tape ends there) he just bolts off the stage without saying goodbye or thanking the interviewer.

Not to shit on Ballmer more than we already have, but man, is he a horrible public speaker. If Microsoft wants to revamp their image, it starts from the top. [WPC09]

Ballmer's been talking about search now for the last couple years as something Microsoft needs to put more money and effort into. The failed Yahoo deal last year was one play that didn't quite work out. So they're trying Bing.

What do you think? Is search Microsoft's biggest mistake? If you ask me (you didn't), I'd say Microsoft's biggest mistake is the guy answering this question. [TGDaily]

Audio clip courtesy NYT.

Audio clip courtesy NYT. First image courtesy Boing Boing Gadgets.

Check back soon for part 2.

First Place — Umadsarah Unicornsaintreel (??)
Second Place — Burrito Tech
Third Place — Derrick Villalpando

Here are your source files. Now use them to place Herr Ballmer in either a wonderful, happy fantasy land or a searing, horrific hellscape. Your choice!

Send your entries to me at contests@gizmodo.com with the subject line of "Fantasy Ballmer." Save your files as a JPG, PNG or GIF, and name it FirstnameLastname.jpg, using whatever name you want to be credited. Send everything over by next Tuesday, at which point I will choose the winners and post the best in the Gallery of Champions. Get Ballmering!

Or, if you want the quick and dirty, here's what unfurled in front of me, give or take a few guest presenters and some marketingspeak:

Ballmer comes out—my guess is he's smiling. He talks about the wonderful world of consumer electronics. He mentions this company called Microsoft. He also mentions the tough economic times we're all going to suffer through together. He will be optimistic, however.

He's going to talk about Windows 7. First, he'll announce the availability the Windows 7 Beta tomorrow for registered Microsoft beta peeps, January 9th for everybody else. He'll run through a lot of stuff we've already seen on Win 7, like DeviceStage, Homegroup networking, "Play To..." and other coolness like the Win 7 touch interface.

On the Windows Live front, he'll tell us that Windows Live Essentials is no longer in beta, and that you can now post photos on Facebook directly from Windows Live Photo Gallery, and save photos from Facebook directly to your Win gallery too. He'll also say that Windows Live Search and Essentials toolbar is gonna boot Google from Dell computers in February. Meanwhile, Verizon Wireless is going to implement Windows Live on VZW feature phones. IE8 is not out of beta yet, but it's coming.

For Windows Mobile, the big news, as presumed, will be full Adobe Flash support in the browser. (Sounds good to me, if only the browser was as good as, well, others.)

Ballmer is going to call Robbie Bach to the stage to talk about connected entertainment. Bach will start with some good Xbox stats—28 million worldwide, with 17 million active Windows Live members, and over a billion dollars spent on the service since inception.

Bach will introduce a number of sweet products:
• Windows Mobile app for managing Netflix queue
• Xbox Live community game builder called Kodu (already buzzed about)
• Windows Media Extender functionality in Toshiba products (announced earlier today)
• The latest edition of Ford Sync, which you can read about here
• Go back and forth on shows you didn't pre-record using Microsoft Media Room Anytime (I wonder what the advertiser stipulations are on that)
• Already known games Halo Wars and Halo 3: Orbital Drop Shock Trooper
• Xbox Live Primetime game 1 Vs 100 live gameshow coming in spring

What, no love for Zune? Almost everything's going according to plan so far, but stay tuned, because anything could happen. You know, come to think of it, Robbie Bach got to talk about a lot of the fun stuff. Is this the kickoff of the Ballmer Years? Or is it really the kickoff to the Bach Years? Steve would probably win at arm wrestling, but seeing the two of them on stage, I'm starting to think Bach could maybe take the bossman in a Cool Hand Luke-style a fist fight. [Full CES 2009 Coverage]

• Windows 7 will hit public beta (or just grab the torrent now)
• Windows Mobile will get Flash by March (weeeeee!)
• Two Halo games for Xbox 360 (this one and this one) this year
• Less terrible home networking ("I'm not kidding" says TechCrunch's Erick Schonfeld.)

It's hard to be exciting when everything you're announcing is an open "secret." The Windows 7 public beta would be a biggie, except we've already touched, groped and licked it, as has everyone else who really cares at this point. So, Ballmer, please, please, please pull a Zunephone out of your pants. I actually want one. Well, not the one from your pants, but I suppose beggars can't be choosers. [TechCrunch]

On a side note, isn't it amazing that Ballmer looks exactly the same now as he did then? Poor guy looked like he was in his 50s when he was in his 30s.