Bach said he expects Microsoft to emerge from the economy's troubles "a much stronger company."

"The economy is going through a reset," Bach said. "In the short term, that means that every business is having some impact. We are going to manage through that and come out the other end of that reset a much stronger company with a great product lineup." Microsoft Chief Executive Steve Ballmer is expected later on Wednesday to give details of the company's deal to provide mobile Internet search services to Verizon Communications Inc, a contract that it won over rivals Google Inc and Yahoo Inc.

Bach also said Dell Inc had agreed to put Windows Live -- an online hub for personal services ranging from e-mail, instant messaging, and photos to Web applications and links to social networking site such as Facebook and LinkedIn -- on all new Dell computers.

Microsoft will also introduce a new "Halo Wars" video game for the XBox console in March, and an online game show channel on XBox Live, Bach said.

"You are going to see us continue to invest in technologies," he said. Microsoft has "tremendous optimism about where the market is going and what the opportunities are over the next five years."