In 1977 at 1:12 seconds into a television report Bill Gates says this “There’s a lot of people who are forecasting that there will be software stores just like there are record stores today. And that there’ll be thousands and thousands of those, and I think I have to agree with that.”

Boy was he was right. Mostly all the record stores have gone and there are now thousands of software stores. Absolutely amazing Stuff! See below…

Defending the $8.5 billion Microsoft paid for Skype, investor Ben Horowitz suggests Google and Apple have had no impact on Skype’s success. It’s the service that Skype provides itself, rather than serious competition. That’s what lead Horowitz’s firm and a group of others to fund Skype with $2 billion just two years ago, despite heavy criticism. In other words, he’s celebrating a $6.5 billion “I told ya so” profit.

He notes that the $50 million his young firm Andreessen Horowitz forked over was one of the first checks written from its initial $300 million pool (far from a small share of the $2 billion that AH, Silver Lake Partners, and Canada Pension Plan Investment Board put together). His stance on the success of this investment decision is firm:

While consistent with our stage-agnostic strategy, it was a very big deal very early on in the fund. To make matters more exciting, other investors and writers broadly criticized the deal. Joe Nocera of the New York Times wrote: ‘Many people on Wall Street–and a number of telecommunications experts I spoke to this week–were stunned by the price Skype sold for, and not just because we’re in the middle of a recession.’ That controversy ended this morning.

Skype sold for more than four times the 2009 price.

Skype’s use and new user growth has accelerated, peaking at 500,000 new registered users PER DAY, and 209 billion voice and video minutes being consumed on Skype in 2010. Wow!

Then Apple built “video calling right into the iPhone” and made FaceTime the “default offering” for iPhone users. This had no impact on Skype’s 50 million users. I can say that’s true, as I have an iPhone and have NEVER used FactTime, but I have used Skype.

Both Apple and Google have formidable cash funds to invest in their own video and audio tools – so really Microsoft needed a system like this to pitch against its big rivals.

We hear that Microsoft will cease development of its family of Zune-branded music players due to weak demand and a desire to focus on its smartphone platform.

Zune will live on as a software-and-services platform, according to Bloomberg’s source. Windows Phone 7 embeds the Zune player for media playback on the phone, uses the Zune Marketplace for online music sales, and the Zune PC software for media syncing and firmware updates.

Since their introduction in 2006, the Zune players always played second to Apple’s iPod line. The 2009 Zune HD model was a well-received, well-designed, and supremely elegant device, although it was a case of too little, too late. It was competing against Apple’s iPod touch, with its enormous App Store advantage.

Microsoft also did little to promote the Zune brand beyond US borders. Until recently, the Zune HD was U.S.-only and as a result, Microsoft failed to threaten Apple’s dominance (77 percent of the digital music player market) last year.

Microsoft Corp. today announced an all-in-one opportunity to jump into the controller-free fun of Kinect this holiday: the all-new Xbox 360 4GB console, the revolutionary Kinect sensor and “Kinect Adventures” packaged together for$299.99 (U.S. ERP). With “Kinect Adventures,” players will make their way through 20 adventures, navigating roaring rapids and ducking and dodging through mountaintop obstacle courses and other exotic locations — no controller, wand or balance board required. In addition, existing Xbox 360 console owners can purchase the Kinect sensor with “Kinect Adventures” for $149.99(U.S. ERP). The sensor, which will work with each of the 40 million Xbox 360 consoles currently in households worldwide,(1) is uniquely able to track your full body movements, respond to your voice and deliver a multiplayer experience right out of the box.

In addition, the new Xbox 360 4GB console, which begins shipping on Aug. 3 in the U.S., will be available for $199.99 (U.S. ERP). With a sleek new design, the Xbox 360 4GB console looks great and includes built-in Wi-Fi N, 4GB of internal flash memory, touch-sensitive buttons and a black matte finish.(2)

“Kinect for Xbox 360 offers tremendous entertainment value for the whole family,” said Dennis Durkin, Xbox 360 chief operating officer. “With full body, voice and the ability to play games with your friends right out of the box, Kinect is the most unique, complete and affordable way for everyone to enjoy controller-free fun and entertainment.”

Even as CD sales and legal music downloads dropped last year, radio use climbed to 93% among country fans (from 79% the year before). Most listeners tune in for an impressive 9.9 hours a week, and crossover artists such as Carrie Underwood, Taylor Swift, and Darius Rucker are luring a growing number of African-American and tween listeners to the airwaves. This year’s Country Music Association Festival, starts today (June 10) with over 56,000 fans rushing Nashville. Our friends from Honky Tonk TV have partnered with Microsoft and will be covering four days of non-stop ’til you drop country music.

Check out their website Country Music Association Festival

Apple’s market capitalization officially passed Microsoft’s this afternoon, making the Cupertino company, for the first time, the largest technology company in the world. With a market cap of $241.5 billion versus Microsoft’s $239.5 billion, Apple also became the second-largest company on the S&P 500, according to Standard & Poor’s analyst Howard Silverblatt. At the moment, only Exxon Mobil is bigger. Crazy!

Microsoft has just announced its brand new Windows-powered smartphone known as KIN. It has been designed for folks who are actively navigating their social lives wherever they are. This is made possible with partnerships with Verizon Wireless, Vodafone and Sharp Corporation, where KIN is meant to be the ultimate social experience. You can’t just pick up the KIN anywhere. It will be exclusively available from Verizon Wireless here in the US from May, while Vodafone is offering it in Germany, Italy, Spain and the United Kingdom later this year.

According to a source via Silicon Alley Insider claims, that Google pays Apple $100 million dollars a year to be the default search engine for the iPhone.

For Apple, that’s not a lot of money. For me that is a lot of money. If Apple wanted more money or options, there’s always Microsoft’s Bing and a big checkbook.