LAS VEGAS -- Doesn't an economy this bad call for a full Monkey Boy?

No, Microsoft CEO Steve Ballmer didn't launch into one of his trademark over-the-top routines, but he played the role of chief industry cheerleader Wednesday night as he took Bill Gates' place as the opening act for the giant Consumer Electronics Show here.

"I believe that companies and industries that continue to pursue innovation during tough economic times will achieve a significant competitive advantage, positioning themselves for growth far more effectively than companies that pull back," Ballmer told the CES crowd. He promised that Microsoft "will continue to invest more than others," citing its $8 billion research and development budget.

Ballmer's remarks came hours after a key Microsoft partner, chipmaker Intel, reduced for a second time its earnings expectations for the fourth quarter. Microsoft, which reports quarterly earnings Jan. 22, hasn't made a similar move.

But in press interviews throughout the day, Microsoft executives talked about the economy and fended off questions about layoff rumors.

"We don't have anything specific to announce," said Robbie Bach, president of Microsoft's Entertainment & Devices Division, when I asked him to detail how his division is cutting back on operating expenses. "We do what we always do, which is make sure we're investing our dollars and our people, talent, in the right places.

On stage this evening, Ballmer and Bach made a series of announcements that were interesting and perhaps notable, but not overwhelming. Among other things, the company released the beta version of Windows 7 and touted new partnerships with Dell, Facebook and Verizon.

It was Ballmer's first CES keynote, filling the role that Gates held before retiring from day-to-day Microsoft duties last year. The crowd at the Venetian Hotel was sizable but not nearly as large as Gates would traditionally attract. Ballmer's recurring theme was the connection between the PC, the phone and the television, linked through online services.

"They're really evolving together into a single seamless ecosystem of anytime, anywhere computing," he said.

The most memorable moment of the night was not an announcement but rather a demonstration of a Microsoft visual software programming tool for children called Kodu. A 12-year-old girl identified as Sparrow wowed the crowd by zipping through the programming interface and then dominating Bach in the game she created. (See accompanying photo.)

"If anyone thinks he threw that game on purpose, that would be wrong," Ballmer said afterward, laughing.

Earlier in the evening, the company touted market share and sales of its Xbox, Zune and Windows Mobile devices, but executives didn't address on stage the massive glitch experienced last week by the 30GB Zune music players.

Microsoft concluded the night with a display of several high-tech prototypes showing the potential future of educational technology.

But even that was a bit of a downer for people who follow the company: What Microsoft didn't tell the crowd was that the demos weren't originally created for the CES keynote, as many would expect. Rather, they were recycled from a college tour conducted last year by Craig Mundie, Microsoft's chief research and strategy officer.

The economy will no doubt continue to be the backdrop on Thursday as CES continues with keynotes from Sony's Howard Stringer and Alan Mulally, CEO of struggling automaker Ford.