Some bits and bytes on Microsoft from around the country:

New York Post says Google's co-founder Sergey Brin has a team of engineers dissecting Bing, Microsoft's newly upgraded search engine. Early data after Bing's launch at the beginning of June show that traffic numbers have improved for Microsoft's search operation.

MocoNews says Microsoft has stopped reimbursing employees for their BlackBerry and iPhone plans, unless they switch to a Windows Mobile device. We ran a New York Times story today on how even discretionary spending shrinks elsewhere, smartphone sales are projected to go up by 25 percent this year. And on the other end of the spectrum, here's another story we ran today about how the poor are using a federal government telecom subsidy for cell phones.

Seattle Examiner reports that Bill Gates shocked Cambridge when he showed up to receive an honorary degree without a tie. Which would make news only in England.

Microsoft CEO Steve Ballmer addressed a packed auditorium of public sector technology executives gathered at the company's Redmond headquarters for its seventh U.S. Public Sector CIO Summit this week. He touched on some of the economic themes that have come up in several of his speeches recently, giving his take on funding for innovative ideas in a down economy and investors' reactions to Microsoft's cost-cutting measures. Ballmer also expressed some disappointment in the progress of Windows Mobile and gave his thoughts on marketing Windows 7. Read on for highlights.

With Microsoft's Redmond campus largely emptied out for the winter holidays, CEO Steve Ballmer crunched the numbers on the proper level of spending for his company against the current economic climate, which he has repeatedly referred to as a "reset" rather than just a recession. Ballmer said his own estimates for the weakness and duration of the downturn tend to be more severe than those of other business leaders he meets.

With that in mind, he settled on $27.5 billion of operating expenses -- a level the company aims to hold relatively steady through the current fiscal year, which ends June 30, and during its 2010 fiscal year. Ballmer made clear to financial analysts meeting in New York this morning for the company's annual strategic update that cutting back even more significantly -- say to $20 billion -- would be "imprudent."

"I think this is right," Ballmer said.

That should give some comfort to those wondering if the modest layoffs Microsoft announced last month were the beginning of a more significant reduction. Wall Street analysts and investors are pressuring companies in every industry to continue cutting costs as sales and profits slow dramatically.

The strategic update call just came to an end. Ballmer gave a detailed look at seven major business areas for the company. Check back here later this morning for more details.

Update, 7:50 a.m.: As he told Congressional Democrats earlier this month, Ballmer said Microsoft's corporate strategists have been evaluating past downturns -- particularly those driven by "deleveraging." The team read company annual reports from 1927 to 1938 to determine who did a good job managing through the Great Depression. "RCA, God rest them in peace, became our role model," Ballmer said. The company was able to dominate the television business because it continued to invest during bad times, he said.

Then he broke down how Microsoft plans to invest.

With Mobile World Congress and Microsoft CEO Steve Ballmer's keynote a few days away, one student asked a timely question of Microsoft Entertainment and Devices Division President Robbie Bach during a speech he gave this morning during the company's annual Minority Student Day. [Update, Feb. 23: I've added the name of the student who asked the question highlighted in this post.]

The student, Najib Jigre of Kent-Meridian High School, asked about features in the next version of Windows Mobile. Microsoft is expected to unveil Windows Mobile 6.5 on Monday.

Bach didn't disappoint, offering a set of features to expect on the next two generations of Windows Mobile, including better connections to services such as Facebook and Twitter.

With Windows Mobile now the fourth-place competitor for mobile operating systems -- a slide from second place about a year ago -- more people are asking what's going on. Here are a series of stories dissecting the business, which some are expecting to make a significant splash at the Consumer Electronics Show in Las Vegas next month.