Our tag line for Internet Explorer 4.0 is: The Web the way you want it. And my belief is that Internet Explorer 4.0, and all the other incredible investments taking place on the Web, are moving more and more people to think of the Web as part of their everyday lifestyle. Now, this is going to take a long time to catch on in a big way. Today, people live a lifestyle where they take the phone for granted, they take the car for granted, they take the TV for granted. We don't say that we're living TV lifestyle, or car lifestyle because everybody knows that we are. It's my belief, or my prediction, that a decade from now, the majority of Americans will be living a Web lifestyle. That is, they will all turn to the Web several times a day for information, entertainment, and communicate. And that they will look at you in a very puzzled way if you say you're living a Web lifestyle, because they will have simply incorporated it into everything they do. This means when you get a business card you will have an electronic mail address. Every lawyer, every doctor, every small business will be connected up.

Now, there are lots of people trying to figure out what the world is going to be like when this happens, what businesses will be valuable, what businesses will be less valuable than they are today. Now, one way to get a glimpse of what this future is going to be like is to look at communities that are already very far along in this direction. I think one place to look is on college campuses, because all the ingredients have come together to generate the critical mass for people to just take the Web as a given. You've got high-speed networking because the infrastructure is simply put in by the university, the students don't have to pay for it. You have very heavy usage and acceptance of personal computers. And because of all of that, the university is willing to dispense with paper forms, and simply decide that going up on the Web to sign up for classes, to see what your grades are, to submit homework, all of that can be done without disadvantaging anyone.

And that's spread. You see the local bank dive in and want to provide Web sites. You see the local pizza shop taking orders across the Web. And you even see those students reaching back to their parents or friends in other places, and encouraging them to get onto electronic mail, because that's the way that it's easy to stay in touch with those people.

Critical mass takes time. And so most of the predictions about the Web where people talk about what's going to happen in a year or two, the dramatic expectations, we always fall short. It takes time for the bandwidth to get there. It takes time for the word to spread, and all the pieces to come together. But a decade is a long time, and during that decade the technology itself will improve very, very dramatically.

Today on the Web, there are probably about 22 million adults in the United States, and about half of those use the Web once a day. The variety of activities is broadening now. Certainly, we're seeing start-up businesses providing every type of information you can imagine, whether it's online city guides, travel sites, vacation sites. There's almost no topic you can think of that you can't find fairly interesting material.

Many of these sites are getting excellent traffic flow. The movie sites, where they'll put up information about a movie opening, typically will get 100,000 visitors over the course of a weekend. Electronic commerce notches up month-by-month into much bigger numbers. Now, it's very difficult to measure electronic commerce, because there are really two elements. One is taking a buyer and seller, who would have been working together in any case, except they would have exchanged their communication about what's being bought, what's the stage of that order, on paper through normal mail in the past. And here they're using the electronic system as a more effective way of staying in touch with each other.

That kind of transfer of existing purchasing can generate very big numbers quite rapidly. You know, Microsoft took its several hundred million dollars of PC purchases and moved it from paper to online. Was that a fundamental change? No, it was a change in the efficiency of how it was done.

The biggest impact is where you are matching a buyer and seller who never would have found each other previously. When you go up on one of the book sites, and you find an obscure book that you never would have found in a physical bookstore, that's a new type of commerce. If you find a very unusual product that you want to give to someone as a gift that you wouldn't have found window shopping, that's a new type of commerce.

This is where we're taking the very mechanism of capitalism, the difficulty of matching buyers and sellers, and seeing if goods should be exchanged. The friction costs of finding each other and knowing the price, that is coming down very substantially. If you take a site that sells personal computers, the volumes you get off of that are really a mix, a mix of transactions that would have taken place and transactions that would not have. Now, the ability to deal with customized products in this environment is pretty amazing. You can order the software you want on your computer, you can find out obscure configurations. One example of this at Microsoft is how we use the Web for our United Way giving campaign. We have people whose style of giving varies pretty wildly. We have people who just want to give their fair share, and get back to work. And so we can send out a little piece of e-mail with a nice button in it. If you click the button, we'll never send you another piece of mail, you know, it's done, it will be deducted from your paycheck. Or, we have people who really want to learn about the agencies that are involved in the United Way. They may want to designate their gift to particular agencies, they may want to understand about the volunteer opportunities. And so we go and author hundreds of pages working with these agencies in the United Way and make sure that's up there. And so people learn a lot more about where their dollars are going, and how they might want to be involved.

And it's only through the Web that that's possible. One interesting fact is that still today about 50 percent of all PCs in the installed base are not connected up to the Web. And so the low hanging fruit in terms of getting more people involved is definitely to get those machines connected up, getting the communications costs down, making the software simpler, and increasing this critical mass that will eventually draw everyone into it.

One of the great applications is moving information that would have been on paper forms now into the electronic version. I had a chance just a month ago to go down and address the governors of the 50 States of the United States. They were meeting in a yearly meeting they do, down in Las Vegas in this case, and so I went out to each of the state Web sites to see what was being offered. Was it just a few brochures that had been put online, was there anything there at all? And I found only two or three that were using it in a profound way, where you could submit applications for business licenses, where you could find out all the procurement that that state government was doing, and so you can immediately be a bidder on that. Some states were taking all the jobs, not just the state government jobs, but jobs they knew about in general, and putting those into a rich database.

I believe, over time, all of that material that governments print, and all of those paper forms they have, will be moved up onto the Internet. I picked Florida to show as a pretty advanced example of using the Internet. And the effect, I think, was very positive, because the governors whose states weren't demonstrated, about 20 of those have called us up since then and said, hey, we'd like to also look good. And so you can use political forces in the advance of technology.

One interesting question people ask is, where are we going to get the time to live a Web lifestyle? Well, part of the time comes from doing things more efficiently than you would have in the past. Being able to get information about a major purchase, you know, what is my used car worth? Very easy to find out on the Web. What travel options are available? Very, very simple to do nowadays. Some of the time, particularly time when you're simply reading or being entertained, will take away from the time you spend reading things on paper, or watching things on TV.

Intel did a study, and the data were presented at a media conference up on Sun Valley by Andy Grove, and the data said that people who have PCs at home watch four hours of TV less per week than people who do not have PCs. Now, that doesn't exactly answer cause and effect. I'm a contributor to that. I do have a PC at home. In fact, I moved into a new home that has a hundred PCs in it, and if you project that out, there's a heck of market out there for personal computers. It's amazing, you can sometimes turn the lights on, sometimes you can turn them off. It works pretty well. Come see it in ten years. It's going to be really quite amazing.

MR. GATES: One element that I think people underestimate, besides the fact that people are drawn in more and more by the critical mass, is the degree to which the hardware and software will improve. Just taking one element, screen technology, in the house I mentioned, the display I do my electronic mail on is a 20-inch LCD. And it's not available at a reasonable price yet, but in two or three years, that will be something reasonably inexpensive. In 10 years, certainly a 40-inch LCD with much, much higher resolution will be commonplace. And so the shift in behavior between what do I read on paper versus what I read on the screen will be profoundly impacted by that screen quality.

Microsoft also believes that the nature of interaction will be improved. Instead of just giving keywords to try and search and finding thousands of articles, we'll be either speaking or typing sentences into the computer. And the computer will have parsed all the different Web sites. And so, if you ask a question like, what is the fastest computer chip available, you won't read about potato chips being delivered in fast trucks or something, because the semantics will be understood. The ability to recognize speech means you'll be able to call in on a phone and ask a question: do you have any new messages, or check on a flight, or check on weather. And those natural interfaces will just make it that much easier for people to be involved.

One of the great things that's happened in the PC markets in the last year is that instead of using all of the innovation to simply drive the PC product at a given price point to be more capable, we've used some of that innovation perhaps as much as half, to create some new price points, lower end price points, under $1,000 for the PC, and that really has started to open up the market.

And, again, looking at this 10-year time frame combined with the miracle of Moore’s Law, you're going to have PCs that cost less than a reasonable TV set does. In fact, the boundary between what's a TV set and what's a PC will be completely blurred because even the set-top box that you connect up to your cable content will have a processor more powerful than what we have today in the most expensive PC. And so, we'll be able to do things like the natural interface, and advanced graphics in calling up any information that we're interested in.

And so, in some ways, I feel like taking a 10-year time frame for my prediction is being very conservative. One thing that forces me to be conservative is, I know I'll be here in 10 years, and so people will be able to tell me whether I was right or wrong about that. The role that Microsoft has is to be a company providing software. We feel great about the progress we've made with Windows NT as a Web server, what we call IIS (Internet Information Server), where we've just put out Version 4 of that product. It was only 18 months ago that we put out Version 1, so we've come a long ways, particularly in terms of letting people do customized pages, and programming them up in a very rich way, and moving the logic up onto the server.

Certainly, we believe we've made a lot of progress in the browser space. One thing we feel is that with this product, Internet Explorer 4.0, during its lifetime, we will go to over 50 percent market share of browser users. So IE 4 is a major event. Dynamic HTML, active channels, the mail client we've got here, the advances in Net Meeting, all of those are based on the feedback from the people who are out there using the Web in very interesting ways. And so, I want to give you a chance to take a look at the product, and to tour you around, I'm going to ask Brad Chase to come up and show us, and hopefully suggest how this all leads to the Web lifestyle.

Thank you.

MR. CHASE: I thought I'd talk a couple of minutes and talk about how Internet Explorer 4 is a step in Bill's vision of what he sort of called the Web lifestyle. We've been now working on browsers for a little bit of time, and we've learned a lot. We got a lot of customer feedback from Internet Explorer 2 and 3. And we sat down to talk about Internet Explorer 4, and we had a set of goals and things that we talked about at the highest level, to think about how do we really make this thing something special. And one of the areas we focused on was the enterprise. And in the first part of the presentation earlier today, I talked about a lot of the things we did for the enterprise.

At a broader level, though, we were trying to do some pretty, I think, ambitious things. We were hoping that we could build Internet Explorer 4, and make it easy enough and compelling enough, so we could attract millions of more people to the Internet. We were also hoping to advance the state of Web content. And in addition, we wanted to further our efforts that we started with Internet Explorer 3 to build a platform so that people could build on top of it, so that they can present their own way to users to take advantage of the Web lifestyle. These were the highest level goals that we had.

And then when it got down to it, we focused on a few areas of the product, four key areas, plus of course the platform area that I talked about. The first, and most important area that we focused on was building the best browser. There's been a lot of discussion in our industry about different ways people get information. And we believe that there are many ways that are appropriate for people to get information, just like Bill talked about people will use their computer and watch the TV, they'll do both.

But, we also remembered that the browsing phenomenon is very useful to customers, looking for information, and I think all of us can identify with the exact amount of information we want to try to get from the Web. I know my own personal experience is that I use the Web often, and I'm trying to find stuff, and it sometimes is really frustrating, you can't find what you want. I see a couple of people shaking their heads. Thank you. Getting to that site you really want to is a hard thing. And so with Internet Explorer 4 we focused first and foremost on building that desk browser.

And so we have features like the Explorer Bar, which is a way to get a better experience, to find the information you want. And some people are a little concerned about security. So when most people still go on the Web that have that in the back of their mind. They're a little worried about that. And so with a feature like Security Zone, we help people feel more comfortable. So the best browser, building that was the first thing we thought about, and improving the whole environment for users, so we can get millions more people on the Internet, get richer content and build a better platform.

The second area we focused on was collaboration. And in this area we worked really hard to build a really compelling, easy to use, entry level mail client. And that's what we did with Outlook Express, so that people could send Web pages to one another, and they could communicate more effectively. And then if you think about it, Net Meeting is an example of an application that is sort of a pioneering application, I might say, for where the Web lifestyle will go. For those who don't know, Net Meetings is an application that lets me share information with people, via audio or video conferencing, white-boarding, or even be able to share applications. And there are some very fascinating ways that people are thinking about using it.

The third area that we focused on was the other -- a newer way of getting information, some people call it push, we call it sometimes Webcasting. It's the ability to have Web sites delivered to you. So not only do we think primarily people want to browse, but we also believe there's a set of people that want content to come to them. I know that I travel a lot, for example. And so it's really convenient for me to be able to take a set of sites, download them onto my notebook and browse them right on the plane, even though I'm not connected.

Another nice thing about what we've been able to do with that technology is allow people to take full advantage of the richness of Internet Explorer 4. So when you look at an active channel, don't just look at how it's great for delivery, because of our architecture, but also look how it's a site that takes full advantage of Internet Explorer 4. It's more compelling, it's a cooler site, it helps advance the state of Web content. It gets more people excited about the Web lifestyle.

And the last area that we focused on is making it easier for users in another way, because when you think about it, it's kind of funny that I browse my hard disk, which is information, one way, and I browse the Web, which is information, another way. So with Internet Explorer 4 we've done all these things to bring the best of Windows and the best of the Web together. I can get to my favorites more quickly. I could have a unified Explorer, and actually browse the Web and then look at the information on my hard drive, in one session.

I could even take my entire desktop and create an HTML page, or essentially customize my desktop with the information I need, you know, such as the latest news or sports scores, or a weather map, or whatever you happen to need. So that brings us to the Active Desktop. And that's the key element of bringing the elements of HTML right to the desktop. So I could get the information I want more quickly and easily, and basically hold a Web lifestyle.

Now, the last part that we talked about is the concept of building a platform. Being in the operating system business, we've worked on that a lot. And we've really worked hard to build a browser that can be integrated into other things. We talked about some of the integration with Windows, but it works in other ways. As I mentioned earlier, America Online can integrate Internet Explorer into its client, to give users a great experience on America Online.

Another example we showed earlier in the enterprise session is the way Lotus takes Internet Explorer and integrates it right into Notes. So if you want to browse the Web from Notes, you don't have to launch a separate application, you can do it right within the context of Notes.

Building a solution platform also means building enabling technologies, working with standards bodies on technologies like Dynamic HTML, so that people can build really cool, compelling pages, that even do things like data binding. So, for example, if I have a table of information, such as maybe sports information on the outfielders in Major League Baseball. I can sort it by home runs, or sort it by who's got the highest batting average. And I could just click on those columns and it sorts like that, without making round trips to the server. So that's the kind of things we're trying to enable, by building a platform.

So that's what we're -- that's kind of the key areas we focus on with Internet Explorer 4, and how we're trying to contribute to the Web lifestyle that Bill talked about. Building the best browser, enriching communication and collaboration, building a Webcasting architecture that allows for delivery of sites, that take full advantage of Internet Explorer and its underlying technologies. In addition, building a true Web integrated Windows operating system, so that you can take full advantage of Windows and the Internet, and do it in a single, unified, consistent way, as a user. And finally, to build that platform, so that other people can build on top of it.

(Series of demonstrations involving Bondai Entertainment, one of the world's largest toy and entertainment companies.)

Presentation Materials
Paul Maritz Speech
Brad Chase Speech