Gates: We're entering 'live era' of software

Gates said Microsoft is working on two products, "Windows Live" and "Office Live," that create opportunities for the company to sell online subscriptions and advertising. Both are targeted at smaller businesses and consumers.

The products won't replace the company's ubiquitous operating system or productivity suite, and people don't need to have that software loaded to tap into the Web versions. "They are not required to use Windows or Office," Gates said at a press event here.