The software giant's sold-out annual Worldwide Partner Conference is expected to attract more than 13,000 people representing companies, which have used Microsoft's technology to build applications that solve business needs. Think security, Web searches, artificial intelligence, e-commerce and inventory management.

Legions are wearing T-shirts proudly proclaiming, ''I'm a geek.''

Microsoft could use a warm-and-fuzzy gathering because it's struggling with a less-than-lukewarm response to Vista, its latest Windows operating system, and watching as other companies, such as Internet behemoth Google and arch rival Apple, maker of the recently released iPhone, win global kudos for design and innovation.

Microsoft has jumped into several new arenas - including video gaming, Web searches, online ad sales and Internet news gathering - that have added more than $6 billion a year to its revenues. Though it is gaining market share in some of those tech-industry sectors, some analysts say Microsoft has taken its eyes off core competencies that generate nearly all of the company's profit - servers, Office software and the Windows operating system.

''Part of the problem is that Microsoft is this nerdy kid who is really bright, really analytical and trying to act cool but not succeeding at it,'' said Michael Gartenberg of Jupiter Research in New York. Microsoft hired Gartenberg in February to be its ''consumer evangelist.'' He lasted in the job three weeks.

''Microsoft's issues aren't so much related to technology as they are marketing and advertising,'' Gartenberg said. ''It needs to do a better job of telling its own story because consumers don't perceive it as well as its major competitors.''

Microsoft's story has plenty of bright spots. Its Windows operating system and Office software continue to dominate the marketplace and are expanding in emerging markets such as Brazil and China. Internet Explorer is still the default Web browser in millions of computers sold to consumers and companies each year. The company became a serious player in the mobile-phone market, where Windows is used in PDAs and other mobile devices.

In addition, Microsoft has invested heavily to break into the $37.5 billion video-game industry. The company's Xbox 360 video-game console in May ranked second in the U.S. with 155,000 units sold, trailing the 338,000 units of Nintendo's Wii gaming systems, according market research company NPD Group.

But it didn't help that last week Microsoft announced one of the costliest consumer-warranty repairs in history, saying it would spend up to $1.15 billion to fix failing Xbox consoles.

The sales of Xbox and Microsoft's other business lines, however, helped push revenue for the company to $44.28 billion during the past fiscal year, up from $39.78 billion the previous year. Net income increased slightly, growing to $12.59 billion from $12.25 bil- lion.