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Developing effective methods for automated annotation of digital pictures continues to challenge computer scientists. The capability of annotating pictures by computers can lead to breakthroughs in a wide range of applications, including Web image search, online picture-sharing communities, and scientific experiments. In this work, the authors developed new optimization and estimation techniques to address two fundamental problems in machine learning. These new techniques serve as the basis for the automatic linguistic indexing of pictures - real time (ALIPR) system of fully automatic and high-speed annotation for online pictures. In particular, the D2-clustering method, in the same spirit as K-Means for vectors, is developed to group objects represented by bags of weighted vectors. Moreover, a generalized mixture modeling technique (kernel smoothing as a special case) for nonvector data is developed using the novel concept of hypothetical local mapping (HLM). ALIPR has been tested by thousands of pictures from an Internet photo-sharing site, unrelated to the source of those pictures used in the training process. Its performance has also been studied at an online demonstration site, where arbitrary users provide pictures of their choices and indicate the correctness of each annotation word. The experimental results show that a single computer processor can suggest annotation terms in real time and with good accuracy.