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Originally published May 3, 2005 at 12:00 AM | Page modified May 3, 2005 at 11:14 AM

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Gates speech peppered with politics, predictions

Save this newspaper as a historical artifact. Within six to eight years, you'll probably be getting news from hand-held computer instead...

Seattle Times technology reporter

If you're a newspaper reader, you may want to save a copy as an historical artifact.

Within six to eight years, you'll probably be getting news from hand-held computer instead of a paper or a magazine, Microsoft Chairman Bill Gates said yesterday at a conference of business journalists in Seattle.

"We believe that more and more of the things that you've read on paper you will read online because they'll be easier to find, they'll be more up to date, they'll be richer in terms of audio, interaction and things of that nature," he told the Society of American Business Editors and Writers.

In a speech peppered with predictions, politics and digs at Google and Apple Computer, Gates also said he wished that Microsoft had never used stock options to compensate employees.

"I actually regret that we ever used them," he said, adding that "the approach we're using now is just a better approach."

Options are now frowned upon by investors, but in the late 1990s they transformed the Seattle area, funneling up to $8 billion a year into the economy, raising real-estate prices and creating a new class of young and often philanthropic millionaires.

Microsoft dropped its options program in 2003 and now grants smaller packages of stock awards that are redeemable over time.

Gates was not available to elaborate, but his comments came after a weekend spent with his friend Warren Buffett, a longtime critic of stock options.

The revelation resonated in Seattle, where Microsoft options made the last economic boom and recession more extreme, said Roberta Pauer, the state's regional labor economist in Seattle. She agreed that it would have been better if they were never used.

"It might feel good at the time, but it is never good to have an overheated economy," she said. "It's like too much cotton candy at the fair."

Gates also reiterated his concerns about the U.S. education system and post-9/11 immigration policies that he said make it more difficult to attract foreign talent.

He urged the journalists to report on opportunities created by globalization and not just on job losses.


Discussing future technology, Gates said Microsoft will emphasize the high-definition capabilities of its new Xbox console, which is to be unveiled this month, but the era of widespread high-definition video is still approaching. High-def display volumes won't surge until prices fall in about four years, he said.

Microsoft is also working to make computers more portable and better tools for communication. He said its software will reduce the number of "communications identifiers" such as e-mail addresses and phone numbers that people use.

Phones in the future will display an image of the person you are trying to reach. The image will indicate whether the person is at home or work and other information about his or her "presence," so you can decide which mode of communication to use — phone, e-mail or instant messaging.

"You will just pick the verb, but you'll only have one noun for that person instead of the many that we have today," he said.

A highlight of the next version of Windows, code-named Longhorn, is a user identification system that could move toward this vision, but it remains to be seen whether users and companies will embrace Microsoft's system.

In a backhanded slap at Google, Gates said online search will continue to improve. "Instead of it being a treasure hunt it will actually give you answers," he said.

Gates also said that while Longhorn and Apple's new Tiger operating system have similarities, it's obvious to him which system he's using.

"You can always tell whether you're on a Mac or whether you're on a PC," he quipped. "Take your applications and stick them in there and see if they run."

Brier Dudley: 206-515-5687 or

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