More than 2.7 million people spent more than an hour each, on average, watching the first day of the NCAA Division I Men's Basketball Championship online. CBSSports.com just released stats for its free March Madness on Demand viewer (the high-quality player is built on Microsoft's Silverlight), which "continues to regularly exceed our most optimistic expectations," CBS honcho Sean McManus said in a statement.

There were 2.7 million unique viewers, up 56 percent from 1.75 million last year. Each viewer spent a little more than an hour, on average, watching games on the Web, compared to a little less than an hour in 2008. Viewers consumed 2.8 million total hours of live streaming video and audio yesterday, up 65 percent from 1.7 million, according to CBSSports.com.

And in reference to the discussion yesterday about productivity and March Madness, there's this: The "Boss Button," which hides the video player with a spreadsheet, was clicked 1.5 million times yesterday compared with 2.5 million times for the whole tournament in 2008.

Here's part of what you get when you hit the Boss Button. It doesn't exactly scream "hard at work," but it's better than nothing...

Watching the NCAA men's college basketball tournament on the Web at work is great. The on-demand player that CBSsports.com has built for March Madness on Demand, using Microsoft's Silverlight, is not perfect, but it's a great way to keep up with the tournament, live, while still "working."

I think the people behind the player might take a bit of pleasure in facilitating this "borrowing" of work time. There's a "Boss Button" on the player that brings up a spreadsheet. And the promo video that rolls when you launch the player exclaims something to the effect of, Forget that 2 o'clock meeting. There's a 2 o'clock tip off.

(Microsoft announced a test version of Silverlight 3 yesterday, by the way.)

But is the tournament, which is now easier than ever to watch at work thanks to the Silverlight app, really the productivity sink it's rumored to be? Staffing firm Challenger, Gray & Christmas floated an estimate of $3.8 billion in lost productivity for the 2006 tournament, a figure that many people questioned (though many others did not) and Jack Shafer, writing at Slate, picked apart.

A German composer, Johannes Kreidler, has found another interesting use for Microsoft's new Songsmith musical accompaniment software. His composition, Charts Music, derives melodies from stock-price charts of Lehman Brothers, Bank of America, GM and other major global companies and market indexes, as well as unemployment rates and other indicators. The melodies are plugged into Songsmith to create short, unsettling songs for each chart. Kreidler doesn't limit himself to traditional financial indicators. He also includes charts of Iraq War deaths and growth in the porn industry. [Update, 6:05 a.m.: Kreidler explains more about the how and why of his composition after the jump.]

Via the Telegraph.

LAS VEGAS -- Here's a short video of Microsoft's Velle Kolde demonstrating new features of Ford Sync, the in-vehicle entertainment and information software that Microsoft has helped the car maker develop. Check out this story for more details on the Seattle-area companies involved in the effort.

A few more CES previews and predictions out today. "[D]efinitely underwhelming" is Kara Swisher's outlook on "the annual egregious gadgetfest in Las Vegas," as well as Macworld in San Francisco.

Mini-Microsoft turns attention away from the layoff scuttlebutt to note that the company has a heap of negatives piling up. "No where to go but up? Opportunity certainly abounds."

The Wall Street Journal's report today on the woes in Sony's gaming business is likely bringing smiles to faces in Redmond, where rivals Microsoft and Nintendo of America are based.

Blockbuster is teaming up with Microsoft to eventually "give customers instant access to any movie on any device with an Internet connection and a screen," a Blockbuster exec told The Dallas Morning News. The movie rental giant is one of the first big names to announce plans for Microsoft's "Live Mesh" technology, a part of the company's broader online services platform for developers.

Microsoft is adding to its stable of independent and original online video with a deal to distribute "The Guild," a popular Web-only show about a band of online gamers. Its second season will be available exclusively on Xbox Live, MSN and Zune, according to The Hollywood Reporter (via Reuters).

Microsoft touted a partnership with Major League Baseball Advanced Media as a major win for its upstart Silverlight Web video platform in spring 2007, but today the company has lost the customer to the dominant online video platform: Adobe Flash.

Microsoft now counts more than 2 million subscribers to service providers using its Mediaroom Internet protocol television (IPTV) software. That's up from 1.5 million in September, when the company announced new advertising capabilities for the software, which is used by providers such as AT&T. The company is announcing the milestone at the TelecoTV conference in Anaheim.

A hardware industry news and reviews site reported today that Microsoft is readying an external Blu-ray disc player for the Xbox 360. X-bit Laboratories, citing unnamed "market sources," reported that "Toshiba-Samsung Storage Technology Corp., a joint venture between Samsung Electronics and Toshiba Corp., has been contracted to manufacture external Blu-ray disc drives for Microsoft Xbox 360 game console."

(Update, 8:53 p.m.: A Microsoft statement shuts the door on this pretty hard. "As we've said before, Microsoft has no plans to introduce an Xbox 360 Blu-ray add-on.")

File this under strange bedfellows: PBS, the national public broadcasting network, has struck a deal with Microsoft to distribute select content to Microsoft's audience of 12 million-plus gamers on Xbox Live. The deal, announced today, follows higher-profile content partnerships between Xbox Live and Netflix, among others.

Here it is:

(Update, 9:38 p.m.: Several people had a problem viewing the video, which was in Silverlight, Microsoft's Web video format, which requires a download to view. I've replaced it with a version from YouTube. Thanks, Dave.)

(Update, Friday, 1:35 p.m.: I've restored the Silverlight version, below. I swapped it out with the YouTube version after people complained that they couldn't view the commercial earlier, and didn't want to download the Silverlight plug-in. Others have noted that you need a Flash plug-in to view video on YouTube. True, but most people already have it. My aim was to make it as easy as possible to view and comment on the ad. I should add that the Silverlight version is running much more smoothly right now.)

What do you think?

When I saw Photosynth for the first time about two years ago, it joined a small handful of new products that really captured my attention. The software arranges sets of photos in 3-D context and allows viewers to navigate fluidly from image to image, moving their gaze from a building's facade to a detail shot of a specific fresco, for example.

Photosynth is a distinctly Seattle invention. It emerged from a collaboration of University of Washington graduate student Noah Snavely and computer-science professor Steven Seitz, with Microsoft researcher Richard Szeliski, as well as a Ballard startup Microsoft acquired. Now at least part of that team is at it again.

In a paper presented at this week's SIGGRAPH (a meeting of the world's top computer graphics researchers), the UW/Microsoft team described the next iteration of their work, soberly named "Finding Paths through the World's Photos." Here's the video:

MICROSOFT

Not everyone can get all live video and replays NBC is putting online from the Olympics.

I wrote today about NBC's unprecedented online video presentation of the Olympics and its partnership with Microsoft. But it turns out not everyone gets to see the best features of the service, including live video, long-form event replays and NBC encore video.

People who don't have a television, tune in an over-the-air broadcast or subscribe to a cable provider that's not one of NBC's "distribution partners" are left out in the cold. NBC said this is a small slice of the U.S. audience, less than 10 percent by its own reckoning.

Microsoft is co-producing a series of digital short films for distribution over the Xbox Live in another sign that online gaming networks are becoming more like all-in-one digital content distribution channels. Meanwhile, Sony is eyeing its own exclusive video offerings for distribution over the PlayStation Network, possibly in partnership with the company's formidable movie and television studios.

Updated, 4:03 p.m.: New comments from Microsoft after the jump.

LOS ANGELES -- One feature of our revamped Microsoft Pri0 blog is video. Check out this tour of "Into the Pixel: An Exhibition of the Art of the Video Game" here at E3. Some of the images are beautiful, and very interesting. I think it gives a sense for how the games industry has matured and is a full-fledged, vibrant art form. Feel free to share your thoughts in the comments below.