This is the winner of the Eurovision Song Contest 2014, Conchita Wurst from Austria. And yes, you are seeing it correctly, that is a bearded lady. Well, actually it is a man, in an awesome gown, with a beard. And he just won the Eurovision Song Contest.
It wasn't a bad song he had. It is a very strong song and a pretty tough song to sing, and he managed it very well (a lot better than other contestants with their songs).
The song that came second was the better song (a wee bit chauvinism here, but The Calm after the Storm is a great song).
Conchita won, because (s)he had a great story to tell. He is a boy, bullied in his youth because he was more girlish than other boys and later because he is gay and a transvestite. The song, Rise like a Phoenix, is about overcoming your troubles and coming out stronger. Something he did with dressing like a woman, but leaving a beard as well.
A story of being who you are and equality for all made him win the Eurovision Song Contest.