Newspaper Association of America
Suite 600
1921
Gallows Road
Vienna Virginia 22182-3900
Luncheon Address By
Bill Gates, Microsoft Corporation
Before
The Annual Convention Of The Newspaper Association Of America
P R O C E E D I N G S
Good afternoon. It's a great pleasure to be here.
I'm interested in doing two things. First, to talk to you about the opportunity to use technology in a better way, not only out on the Internet, but in the operation of your newspapers in a very broad way. The second is, I want to undo a little bit of what you heard in the introduction.
I want to point out what Microsoft is doing and why I think the newspapers, being out on the Web is a great thing and something that you have used, integrate into your business in the years ahead, perhaps, with different competitive dynamics, but something that draws on all of your strengths in a very exciting way.
The personal computer connected up to the Internet is a revolutionary device and I think it deserves to be compared to other big advances in communications. People who think of it in terms of manipulating numbers are missing the whole point of the personal computer. Over the last 20 years, the cost of computing has dropped by a factor of a million and that's taken it from a device that only large organizations can use to something that individuals can work with.
In the next 20 years, we can say for sure that the cost of computing will drop again by a factor of a million. So, everyone will own for very little expense, computers hundreds of times more powerful than the most powerful computers we have today.
What are we going to do with all that power?
We are going to create computers that understand information, computers that can speak, that can listen, that can recognize handwriting, computers that even with inexpensive digital cameras can see and know what is going on. So, when you think of the PC of today, that is not the PC of tomorrow any more than the PC of five years ago is what we have right now.
The structure of the PC industry is very, very important. It's a hypercompetitive industry because there is so much specialization, Intel making chips, but many people competing with that, Microsoft making software, a lot of competitors in that space. And then systems manufacturers and application manufacturers pursuing their goals. Driving that forward and getting those machines connected up at higher and higher speeds will change the world, first the world of business and then next, the way that people operate in their homes and, perhaps more importantly, the way that people are educated.
Now, standards have been central to this. We know it's successful because it got a lot of applications and that drove more momentum. The biggest investment we have ever made is building a thing called Windows NT. It is a platform for integrated computing and it is what is being used in most of the Web sites that are now being put out there.
Again, it's very volume-driven. This is a scale economic business, where the marginal costs of selling an extra copy of software is very small. So, we can afford to put billions into the R and D of these products and yet, go out to a large mass market.
If you look at the newspaper industry as a user of technology, it was a pioneer. You were among the first to go out there and move to digital typesetting. There is good news there in that, you helped bootstrap of lot of the technologies. The bad news is, those systems are very fragmented today. Some of the systems are very old and they are not very well integrated together. As the world has gotten more and more digital, the richness of layout and topography and group coordination has gotten so good that, your brethren in other industries are actually using digital technology in better ways.
A key point here is that, as the Internet comes along, the importance of integrating these systems, having common systems from city to city, having departments sharing information, easily taking a customer record and seeing what they're doing in print and what they're doing on the Internet in a sophisticated way, that will require using technology quite differently.
So, this idea of a platform is very important. It's not just for business needs, but also the editorial needs. By moving into the mainstream of PC technology, there is a very straightforward way to use inexpensive building blocks, systems that are dramatically less expensive than even maintaining the old systems that are out there.
Moving Windows into this publishing area has been a big focus for us, color management, font standards, getting the proprietary systems moved over so there is an evolutionary path. You saw the announcement where ATEX is moving onto this platform.
There are also new developers, very focused software companies, doing great, innovative things. I have just picked a few of those to mention, Unisys in Europe, Pantheon, a builder. ISSI has a great editorial system. Newsmaker is the one that is out today, but their new one that is coming out this summer is much better because it really draws on PC technology, standard packages that have been extended.
On the applications side, people like Geac have done a full set of applications that run together on this platform. So, we are very interested in working with leaders in the industry to show the way as to how technology can be applied.
Let me now shift and talk about the Internet and what I see newspapers having the chance to do there.
The Internet has very low cost of entry. Anybody who gets a PC and gets a little bit of software can set up a Web site. That means that everyone is a publisher. I was out at a very poor elementary school today and these fifth graders were telling me how they build Web sites and they are actually funding the technology being used at their school by going to local businesses and doing Web sites for them. So, you have to watch out for these fifth graders.
They have printing presses in the form of personal computers. They are very creative in what they are doing. They are growing up taking this technology for granted. That is where you get incredible innovation, where people are pushing that forward.
If you want to see a microcosm of what the world will be like in ten years through the changes the Internet will bring, you should go to certain university campuses. On these campuses today, you cannot sign up for a course without using the Internet. You stay in touch with your friends. You get class notes. You receive your grades. You submit homework. If your parents want to talk to you, they'd better learn electronic mail because that is how you communicate.
Once somebody gets involved in using the Web and takes it for granted, then for anything they are planning, anything big they are buying, any information they want to get, they will view it as a resource, not the exclusive resource, but a very important resource.
I was in Detroit yesterday and we were showing doing car buying on the Internet. One of the nice things there is, you can find out what the dealer paid to buy the car. So, when you go in to do that negotiation, you are a little smarter than you used to be in that discussion. You can actually buy the car through the Internet, get somebody to quote you that way. About one percent of cars are sold that way today. That will go up pretty dramatically.
In about 15 percent of cars sales, the person visits the Internet before they actually go to do their transaction. The information is getting richer and richer there.
Now, the primary role of Microsoft overwhelmingly is to provide these cheap building blocks. Windows NT, Office, FrontPage as an authoring tool and things to help you manage your site, software to rotate ads, software to see what is popular on your site, software to create communities, where people can come in and chat about issues, that is becoming turnkey.
Even very small newspapers, for a budget on the order of, say, 40 - $50,000 should be able to get the communications lines in and set up a wonderful Web site that covers a vast range of areas. There is no need to go to proprietary systems or get locked into anything or even spend a lot of money. The building blocks are there. Once you have that, it is up to you in terms of editorial creativity, advertiser relationships to see where that goes.
Of course, at first, what people have done with the Web is, primarily taken print-based material and simply made it available. So, the Web is just a distribution medium to get things out there at lower marginal costs and in great timeliness. As people are getting more experienced, their expectations are going up quite a bit and republishing is no longer enough. Some newspapers are doing wonderful things to go beyond that.
We have to take advantage of this new medium and I don't think anybody knows yet the full potential. I think some of the key things are always up to date, in-depth information, as much as you want by following links, an experience that includes audio and video as well as plain text. Most importantly, I would say, the ability to personalize the content.
Microsoft feels this is fundamental. So, we are taking the idea of taking user preferences and building an engine that can generate pages for that person and providing that in our product technology. That is available for everyone to use for their applications.
Another key technology is letting people type in English sentences instead of having these key word search things where you end up getting 50,000 hits and you're supposed to wade through that. We will let you put in a sentence and we will use that and we will give you the answers that really make sense for that sentence. Unless you check and say you are a librarian and you want every single site there, we will find you the few that can really satisfy your interests.
As we have been studying these search requests, people's interest do--you know, the things repeat again and again there and we can do a great job on that.
The linguistic technology we are applying here is the same linguistic technology that we put into our productivity tools, into Microsoft Word to do grammar checking or to do spell checking. So, there is an engineering piece of this that is going to make it far more accessible and far more customized.
Now, the Internet is a gold rush. Everybody is investing in it and people feel bad if they are not involved and their kid comes and says, Dad, what is your URL? You have to say something.
So, you go out there and do something without really understanding what the payoff for that is. Because of this incredible over-entry, where everybody is jumping in, it's pretty slim pickings right now in terms of incremental revenue. Even people who think of the Internet on the basis where they are not asking it to fund any of their other costs because it is not yet cannibalizing the other activities, most people are not at break-even on what they're doing.
The only site we have that meets the test of being a profitable site is a travel site called Expedia, which is a transaction-oriented site. There are a number of those like Amazon and some others that have gotten a profitability.
Subscription-wise, the best number there is, is the "Wall Street Journal," which just celebrated getting to 100,000. The "Wall Street Journal" is the best case. They are the most branded, unique, high demographic people who use computers, need up to date information that there is. It took some effort to get there. So, that is going to take time to develop.
If you look at something like news on the Internet today, there are so many choices out there. You can go to an AP site, get it directly. Don't go through intermediaries; just go to AP. Go to dozens of newspapers. Depending on what news you are interested in, you have lots of choices.
Here, in this medium, there is not the clear separation that there is in the physical world. So, you are going to have local TV affiliates putting up news sites. You are going to have the "Yellow Pages" people putting up directories and what are essentially classified ads. You are going to have software startups doing lots of things.
This gold rush-type atmosphere will stay around for the next four or five years. At some point, things will shake out. People will figure out what are the revenue models and they will not fund startups at quite the aggressive level that they have here.
Now, for customers, this is great news. It means the amount of money going into building the tools and experimenting is accelerating the market in a way that a rational set of investments might not. So, we are going to go through what should have been ten years of evolution in about three or four years.
Newspapers are in a very strong position here. People want depth. People want high quality content. Advertising will be the primary revenue source for most of these sites. People want someone who has the discipline when publishing under time pressure and the brand recognition is a very important thing that newspapers bring to all these aspects. I believe particularly in classified ads, the ability of the paper to offer a print-based offering that includes being up on the Web and it will be a dominant offering for a long, long time.
Eventually, there will be public kiosks around your community where you can go and browse the Web. It will be at least a decade before most classified advertisers would say, "No, I only want to sell to people who are living this Web lifestyle." Now, maybe if you are near some university where you are selling to the student market, it could happen well before that.
There is time to learn here, time to get these things right and newspapers come in with a lot of very strong advantages in doing these things.
Microsoft's strategy here is to learn and continue to play a primary role, which is building software technology. We are an over $12 billion a year software tool company. That will be the primary source of our revenue, the primary source of our profits forever. That is what we are good at.
Now, we are going out and pushing the boundaries here a little bit to learn how we can use technology, primarily personalization technology, but also some of the linguistic. We got in with NBC to do an interactive news site. That has gone very well. We are getting a lot of traffic there. It's a big investment.
Part of the reason we worked with NBC was to be able to use some of their video. The band width on the Internet does not make that very simple today, but if you take a five to ten-year time frame, that will be far more common. So, there will be some benefits out of that.
We are doing an entertainment guide, a guide that tells people what they can do. If you are interested in it, you should go and look at what we have out there. It is more of a competitor to a weekly entertainment guide than it is to what goes on in the daily newspapers. It is called Sidewalk and we are doing some innovative partnerships there with Sidewalk and we are learning. Over the next year, we will be out in about eight different cities and see what kind of reaction we get there.
Expedia is the travel site. As I say, that has come the furthest along. It is mostly based on technology. We have worked with American Express who is selling that to the corporate market.
So, don't think of Microsoft as a primary competitor here. Think of us as somebody who can provide technology and, in some of these areas, like Sidewalk, maybe there will be some overlap. It is not core overlap. We are not doing local news. We are not doing classifieds. We are seeing where this technology can go.
I have listed a number of people we are working with. One example is, there is a weekly paper in Seattle, "Seattle Weekly-Side Week." They do a very similar thing to what Sidewalk does, but they do it in print. So, we decided that we could share information with each other and be of value to each other. So, that is a very good partnership that is getting us going there.
Obviously, NBC and then I listed a number of other people who are doing things with [unintelligible]. In fact, a lot of the partnerships we are doing now are outside of the United States. There is a lot of flexibility to say, okay, in the first few years of this, we are willing to do it differently than we might do it in the long run and both learn together how the business is going to work.
One example of a newspaper that I think is doing a great job using low cost technology, mainstream technology, is Philly Online. One of the things you quickly learn on the Internet is that, those stories where you just take what is in the newspaper and put them up, people are not very interested in that. Stories where you get the interaction and you say, okay, under this tax proposal, enter what your income is and see how it affects you or type in your zip code and we will show you if they are giving out a lot of traffic tickets in your area and things that are interactive and draw on what that person cares about are great.
On the NBC site now, we take your zip code and we show you how your congressman voted on the issue that is being covered in that story. So, we will put it right there automatically just because we know where you are located. Then we will put a link in. You can click on that and send e-mail telling your congressperson or senator whether you are with them or against them on that particular area.
So, the idea of being innovative and going further is very, very key in Philly Online and with someone we have worked with to provide the technology there.
So, in summary, I really see an opportunity for you to use technology. An online newspaper is not enough. We have to take it further. You have some fantastic strengths, I think, in terms of local information. Newspapers are going to lead the way and the Internet will be part of your portfolio businesses. It will not replace the other things that you do, but it will be in there and be important.
There will be a lot of competitors, particularly in these next four or five years. You should not get overly paranoid thinking somebody is a broad competitor and it is not possible to work with them in some ways when that is not what they are doing. If somebody starts hiring local reporters, okay, then you should get worried. Then they probably are trying to duplicate the whole thing. I dare somebody to do that. It just would not make any sense.
A final point and, perhaps, the most subtle one is, to be ready for this new world, you have to use technology in your current operations. If your employees don't have electronic mail and are not sending mail around to each other, if they are not going out to the Internet to research things and find things out, both on the business and editorial side, you are missing a great opportunity.
We are at the beginning of the information age. I'm sure many of the people here are going to be the pioneers who show us what the potential is and we are looking forward to working together on this.
Thank you.
MODERATOR: Bill has graciously agreed to answer some questions. We are going to go until this audience runs out of questions, he runs out of answers or we hit 2:25, whichever comes first. We have two people in the audience that I'm going to turn to, to ask two questions in a second. Since I have the mic, I'm going to ask the first question.
[A question and answer period follows.]
MODERATOR: Bill, close your eyes for a moment and imagine, if you can, that you are not the chairman of a multi-billion dollar software company, but rather the publisher of a newspaper somewhere in the United States, maybe even in your home town of Seattle. What would your electronics strategy be?
MR. GATES: Well, I would certainly have a presence out on the Web today. I would certainly want to become a place where the community turns to chat about things or to find things out. I would certainly want to think about how to present traffic and weather, those things that are often changing and people are going to come back on a regular basis to get.
Frequency of how people visit makes a big difference in terms of whether something can be advertiser funded or not. If you only come to see something once a week, it is almost impossible to make the business case. If it is something that people look at multiple times a day, then it is great. Weather, in a sense, is the most profitable thing on the Web, because you get it for free and people look at that quite a bit.
The thing I would do is, try and share costs between my print side and my Internet side. I would not have an Internet division and I would not have an us-versus-them-type thing. I'd make sure everybody in the paper used PCs, used software and probably, in the process, take a lot of cost out of it and put a fair bit of efficiency in the thing.
So, then I can dial in how much more investment I'd put on the Internet site as the business grows. I'd go ahead and put classified ads up there right away, because any time you enter the classified end for the paper, you can just, boom, have it automatically go up on the electronic site.
I would do some fun things. I would create visibility for my Web site by labeling things as experiments and then be willing to try those out.
MODERATOR: I'm going to have to trust that Lincoln Milstein [ph] the Vice President of New Media for the "Boston Globe" is out there.
Lincoln?
MR. MILSTEIN: Thank you.
Mr. Gates, now that you are one of us in the publishing business, so many of the decisions that we make everyday are based on our own personal tastes and our own intuition. I was wondering if you would indulge us and tell us a little bit about your personal tastes as a news consumer. Will you take us through a typical day or a week in the life of Bill Gates? Will you tell us whether you read newspapers regularly and, if so, which ones? Will you tell us whether you watch news on TV, whether you read magazines and, more importantly, will you tell us as a consumer how you would change those products to meet the challenges of the future?
MR. GATES: Okay, the first thing I want to say is, my personal tastes are not typical.
In terms of how we design our products, we are not aiming for this market of one. When we do software products, we are aiming for a very broad marketplace.
I do read a lot of print material. I read the "Economist" front to back. I read the "Journal" not every article, but a lot of it everyday. I read a local Sunday newspaper, the "New York Times." I read most of the business magazines. I read science, "Scientific American." At work, I read a lot of trade journals. I only get four trade journals at home and I get about six at the office.
I'm a little split now in terms of how much I read off the Web versus how much I read on paper. Take the "Journal." I can get it electronically, but I just have the habit of reading it on my exercise bike. I need to get an LCD on there and see that.
There is a key point. It is screen technology. As that improves, it will change this tradeoff between what you read in paper and what you don't read in paper. Ten years from now, screen technology will be dramatically better than it is today.
There is also a theory of distribute electronically and print locally which somebody like HP, who is in the printer business, of course, will try and push that as much as they are able to.
But if you take computer trade journals, I have now switched to read, say, "PC Week" much more online than I read it in print. It's a little disconcerting though, because when I read online, it marks which articles I've read and everything. Then when I get to the print and it is in a different format, I find myself paging to an article and saying, no, that is the one I already read. So, I think maybe for trade journals, I'll flip over and at some point be primarily electronic in doing that.
If you take the "Economist," the only time--that's a pleasure thing. That's nothing to do with business. That's goofing off when I read that. So, I still do that in print, except they can't get it delivered to me until Monday or Tuesday. So, I do go up on the site on Friday and search to see what they have about businesses I care about or technologies. So, that one slice of it, I will go and read there.
I am an avid reader of "Slate Magazine," which is an online thing that Michael Kinsley runs at Microsoft. Then I use Expedia to do travel and Amazon to buy books and I've found a lot of nice gifts for people out on the Internet.
MODERATOR: Somewhere in the back, I've been assured Bob Engel [ph], the Vice President for New Media of [inaudible] exists and wants to ask a question.
MR. ENGEL: Mr. Gates, I was interested in your remark that, perhaps, we should not be so paranoid about working with a company, on the one hand, on software products and platforms and so on, who may be competing with us in some other ways. Your friend, Andy Grubb, of course, says only the paranoid survive. So, I think many of us would cop to being paranoid.
You also said we shouldn't worry until we see a company has gone out and is hiring local news reporters. As far as I can tell on the "Sidewalks," that is exactly what you're doing.
MR. GATES: No.
MR. ENGEL: You are not?
MR. GATES: No.
MR. ENGEL: You are staffing each of these sites.
MR. GATES: Not with reporters, no.
MR. ENGEL: Well, it's a thin line between people who collect listings information and reporters. They are reporters of a sort.
MR. GATES: Boy, do reporters know that they're just list gatherers?
[Laughter]
MR. ENGEL: Are critics reporters? Are critics reporters?
MR. GATES: A critic is not--a critic is something where you can get an overlap between an entertainment guide, which is what we are doing and, what is in the newspapers. I mean, certainly you have the movie listings and what their times are and things like that. So, that portion of the newspaper which overlaps the weekly and overlaps other things, "Sidewalks" intersects with that. Don't get me wrong, but that is not--this is about people who are interested in going on the Internet and having us recommend things to them based on a very day to day driven approach and a very profile driven approach there.
MR. ENGEL: Selling advertising to directory listings is very, very closely akin to classified advertising. So, I guess my question would be, since there are alternatives to using the Microsoft platform, many times as good and in some cases superior, why should newspaper publishers contribute to your principle revenue stream when they see you coming in as a competitor in the sale of advertising?
MR. GATES: Well, there are many people who sell advertising. I assume some of you watch TV.
If your question is should you make your rational decisions, my answer would be, no. You should buy the best products to get things done. I come from a business where everybody is a competitor with everybody else and everybody cooperates with everybody else. People are very smart about knowing when they should do a partnership with somebody and use their technology and when they are in competition. That's just how it works everyday.
So, I think in picking technology, it would be unwise to pick inferior technology just because of that. If you think something is better, great. I think that is fine. You should not tilt in the other direction, but the opportunities for taking advantage of our technology, I think we have a very strong case there. That is our primary business.
You look at the employees of Microsoft. That is what we are out there doing everyday. The only rational decision you would not buy the best product is, if you thought that you could by denying your purchase dollars, put a company out of business. That just doesn't come up very often.
MODERATOR: Not nearly enough.
We are going to move to questions from the floor now. I'm going to have trouble seeing, but I have one right there somewhere. So, wherever I'm pointing.
QUESTION: Hello, Mr. Gates.
What is your view of what the print newspaper product will look like in ten years and in 20 years?
MR. GATES: Well, I don't think my crystal ball is that much better than anybody else's. I doubt the print newspaper will look dramatically different ten years from now than it does today. It will probably have more URLs. It will probably have more subscribers who are talking to you about what they want through electronic mail. You will probably treasure the fact that you have the electronic mail addresses of a very high percentage of your subscribers, since most of them will be on electronic mail.
I think you will have gotten to the point where your Internet revenue better be funding more than just the Internet marginal costs. It had better be funding some part of the basic costs of the business as well when you get to that point.
I do not think the print newspaper will be substantially different than it is today. Everything you create there you will be using in electronic form as well.
QUESTION: Why?
MR. GATES: To make money.
QUESTION: Mr. Gates--
MODERATOR: I'm sorry. Was there a question that followed up on that?
QUESTION: Yes.
Why won't it look different, given the opportunities of the Internet?
MR. GATES: Well, you're asking me about the print--why the newspaper would look different. It's like saying, will plays be different after movies or will TV be different. I mean, the old mediums, the mediums don't change just because a new medium comes in. People like the newspaper today. They like what they do with it. So, I'm not even sure why you're saying the paper would be different just because some information is coming in interactively.
MODERATOR: Well, you've made the newsprint manufacturers very happy.
Yes, sir?
QUESTION: Mr. Gates, you recently addressed a convention of the broadcast industry and commented that their drive toward HDTV might make them obsolete because Microsoft had a better idea. Can you recapitulate that argument?
MR. GATES: Okay.
I did not speak at the broadcasters' convention. There was a person from Microsoft who spoke at a subpart of it, which was the multimedia element.
There is a bootstrap problem for high definition TV, which I think you can probably appreciate very well, which is when you are funded by advertising, a high resolution Coke ad does not sell more Cokes than a low resolution Coke ad. So, when a TV station thinks, oh, great, we get to buy all this new equipment and do all these new things in order to transmit this better signal for no additional revenue, it is tough to get the bootstrap. Plus which you have a very high percentage of the people who get that local station, getting it over the cable.
There is an old approach of doing this, a way of including those signals, that was coming along for a long time ignoring what was going on in the computer industry. So, now there is a question of should that old approach be the one that those guys broadcast or should they use this other approach? It has to do with interlace versus non-interlace. It is very much an engineering kind of debate.
PCs like screens that all the lines are together, rather than first odd then even. So, there will be a lot of PCs that can receive that progressive scan capability and cannot receive the interlace. So, we're talking to people about which one should they broadcast. Should they broadcast multiple? Should they include the one that the PCs happen to support?
This will be worked out by engineers, believe me.
MODERATOR: Yes, sir?
QUESTION: Yes.
You will be happy to learn that we are NT users at our newspapers. One of our problems that we are facing--by the way, we do have a Web site and we also run our classifieds and have done very well financially on the Web.
My question is, we are looking for software that we can seamlessly move to print display ads on to the Web without a lot of human intervention. Are you working on a software package to do that?
MR. GATES: Absolutely. Between ourselves and third parties, we will make that very easy for you. In fact, the whole way that your advertisers submit display ads to you, there is a way to make that far more electronic and take a lot of your costs out of the system and at the same time, get it up on to your Web site in its full richness. So, we should chat with you about how that is done, because that will be standard procedure.
QUESTION: Is there a question out here?
Yes?
MR. BROOKS: Walter Brooks, I write a column for "Editor and Publisher Online." I would like to ask you to clarify--oh, by the way, thank you for lunch and I can report in my column today that the condemned media ate a fine meal.
Your MSNBC site, which is one of my favorites for getting news, satisfies my desire for serendipity when I make the personalized version, because no matter what I do with your site, it forces me to have something called Weird News, which I find is wonderful. If I would structure my personal edition, I would eliminate all the things I think I don't want to see and, therefore, miss that story I stumble on when I'm reading the "Times" or the "Journal" on the way to the back.
However, your MSNBC had a poll a month ago or a month and a half ago that said, your viewers, 65 percent reported that, by the year 2000, 65 percent of the viewers, the surfers to MSNBC said they expected to get all their news from the Internet, which lies in the face of some of the kinder words you said.
MR. GATES: Wow, that much be a strange early [unintelligible].
When you think of news, you're going to turn on the TV set and watch Tiger Woods make that last shot. You're going to pick up that Sunday paper and see what is going on there. You're going to pick up that entertainment guide and flip through it and see what you happen to want to see there.
Because the Internet is a gold rush, the opportunity for some of you to overhype it and say, overnight everybody goes out of business--no one will ever go to a store and buy anything ever again or the opportunity to write the article that says, oh, it's worthless. It's hopeless. It means nothing. It will never be popular. You know, we are just going to go through those cycles.
Those articles, both of them, will be written thousands and thousands of times between now and ten years from now which is how long it will take the content better, to get people used to it, to get the devices easier, to get natural language into it, to get the prices down of all these things and make it so, at that point, it will all be taken for granted. No one will ever write an article about it again and everybody will understand the fact that you have all these skills that carried over into that new form.
Okay, of course, that was destined to happen and we will move on to the next thing, probably discussing artificial intelligence.
MODERATOR: A point of clarification. We paid for this lunch. We may be slow, but we're not cheap.
: Is there another question out there? I think I saw a hand. Yes, right in the middle front row.
MR. COHEN: Hi, I'm Matt Cohen, Chief Technology Officer for New Century Network.
As we build new products for the new medium, new news and entertainment and other products, we take forward lessons that we learned in other media. You, as well as most of the companies in this room, are in the process of learning those things.
As we move forward, we also bring forward things that we learned that were important because of restrictions and limitations of the old medium. That is a natural process. You mentioned that the first thing that happens in the new medium is, you repurpose what is going on in the old medium.
So, as someone who is experimenting with new methods of delivering information, my question to you is, what things--well, let me back up for a second.
Somebody mentioned to me that their daughter had asked them why do they call it dialing a phone number. That makes clear how some of the things that we take completely for granted, that are very, very ingrained in the way we think, will vanish and become completely invisible to the next generation.
So, my question for you is, what are the things about the way new in particular is done today, from where you sit, that will vanish and become invisible in the next medium?
MR. GATES: Well, we are everyday MSNBC.COM is our experiment in seeing what people like. The reader feedback thing where you can go in and rate a story and you can see how the other people are rating stories, that is incredibly popular. Having audio clips is just incredibly popular.
They have to be a little bit careful because when people first use a new medium, there's a kind of fascination with it that is not projectible out to the next audience who use it. Even these early users are going to stop goofing around in some ways.
For example, I think the percentage of people who go out and use search engines and type in crazy queries, I think that will go down a lot, because we will be able to customize for people a much higher percentage of the information that they are interested in.
So, in a lot of ways I'd say it is too early to tell. The news ticker that we have done where you can have the stock price in the news story, that's incredibly popular. We get a heck of a lot of our traffic that way. We have a site called INVESTOR.COM that costs us about a twentieth as much to create as our news site and has traffic about the same. In fact, INVESTOR is very close to being a break even site, which says to you the news site is not. When you want to learn about these things early, it requires that kind of investment.
I'd say it's really too early to tell. The average age of the news reader of MSNBC is much lower than the average age of a newspaper reader. Again, is that something that continues or is it just that early audience phenomena.
MODERATOR: Well, perhaps to no one's surprise, we ran out of time rather than out of questions and answers.
So, I want to thank you, sir, for joining us today. Before we say goodbye, I'd like to perform one small experiment about "Sidewalks."
How many people in this room publish some form of a weekly entertainment guide? Please raise your hands.
[Pause]
MODERATOR: Just a point about competition.
MR. GATES: No, here's the point. In the only [unintelligible], we are in partnership with the print-based entertainment guide. We found a way to share costs to help each other out. We are not going to do a print entertainment guide. So, we would love to talk to people who do that, about is there a way to help each other.
MODERATOR: That's good. We love it.
Thank you.
[END OF ADDRESS]