LAS VEGAS -- Microsoft wants to control your digital lifestyle, and at the Consumer Electronics Show on Sunday night, Bill Gates announced one more project to help the company do it.

Windows Home Server software, available during the second half of 2007, will act as the center of a home's computer network, from photo and video storage to television to accessing computers files at the office away from home, Gates said in the keynote that kicked off the conference.

The announcement sets up a head-to-head battle with Apple Computer, which is expected to provide details of its iTV set-top box at MacWorld in San Francisco on Tuesday. Both companies are targeting the more than 40 percent of American homes with broadband that can deliver movies, TV, music and data from the Internet.

"A big part of connected experiences is connected entertainment," Gates said. "We think it's a category that could explode in importance."

Gates, Microsoft's co-founder, chairman and chief software architect, also highlighted deals that will bring video and online services from cable TV channels Fox Sports, Nickelodeon and Starz to its 6-year-old Windows Media Center, a less ambitious software system that will be integrated into the company's Vista operating system coming to consumers at the end of January.

Robbie Bach, president of Microsoft's Entertainment and Devices group and a fast-rising executive at the company, discussed the millions-strong community around Microsoft's online gaming service Xbox live, and plans to replicate it among users of Microsoft's Zune, an MP3 player released in November.

Bach said the Xbox 360 gaming console would be acting as a set-top box for high-quality, interactive Internet protocol television, or IPTV, by the end of the year.