Remarks by Bill Gates, Microsoft Chairman and Chief Software Architect
Newspaper Association of America Annual Convention
Seattle, Washington
April 29, 2003

BILL GATES: Thank you, Frank, for those very generous comments. I have enjoyed the world of philanthropy, and learning about that, trying to do a good job on that a great deal, and it's something I'll be spending more and more time on because of the great luck and success I've had in the world of technology.

I wanted to mostly today focus on where technology is going. Six years ago in Chicago, 1997, I had a chance to talk to this group, and it was a fascinating time, because it was the beginning of what I termed at that time as the beginning of a gold rush. And certainly Microsoft got very swept up in that gold rush. It's easy to look back now and look at some acquisitions or things we did that in a normal calm time, very sober times that we have right now, maybe we wouldn't have done. And yet, what's been learned over these past six years, the new technologies that have been created, the access to information that's come out of that, I think is rather fantastic. And rather than simply focus on some of the panic, and devaluations, and the craziness, we ought to see it as a foundation to build on.

Many of the predictions that were made during those times, although they were wrong in terms of the time frames involved, they were right directionally: the way that business would be done, the way that reading and information would be dealt with. And so, now, what we're left with, the legacy of that is taking the lessons and saying over this next decade exactly how those things are going to roll out.

I think for the newspaper business, it represents a new way of relating to readers, particularly young readers. It represents a new process of how the news is gathered and presented in different ways, and a lot of excitement around how this could be done.

You'll find me very optimistic at this point, because at this stage people are underestimating the technology advances that are taking place. That's a bit different than in '99 and 2000, where people were expecting some people -- were expecting things to happen overnight. Now, they've almost lost sight of the fact that the key drivers, the chip miracle, the software advances, and reaching very important milestones. Things like speech recognition, or handwriting recognition are coming along in a pretty fantastic way.

The '90s were about the PC. The PC is still at this stage the key device that everybody comes together on, and it's very influenced by this history of being an open device that anyone can manufacture. There are over a hundred different PC manufacturers, very competitive business. The average price of the PC for a consumer is down in the US$600 - $700 range, and even though that is so much more powerful than anything that came in the past. The graphical interface has connected up to the Internet.

Well, this decade we call the digital decade. Why do we use that term? Well, despite the popularity of the PC in the '90s, most of the activities that people engaged in were not changed. The main activities that were changed were creating documents, where the word processor was preeminent, and the starting of electronic mail as a way of communicating. By the end of this decade, 2009, the number of activities that will have been changed by digital approaches will be extremely broad. It will be common sense, certainly for your younger readers, if not all of them, to pay bills electronically. The music that they buy will be digital. A lot of the material that they read will be read off the screen. The way that kids stay in touch with each other will be instant messaging brought to a whole new level, with voice and video as part of that interaction. The way that people buy and sell, that you bid out to buy something, will be fundamentally changed by electronic commerce. Electronic commerce was over-hyped, because the foundation had not been put in place. But, now over the last few years companies like ourselves and IBM, under the industry term Web services, are actually building that foundation to make that common sense.

It's actually a very exciting decade, even though from a business point of view the spending on IT is down from those peak years. Even with those constrained budgets what we can deliver to our customers in terms of quality and operational efficiency makes this still a very exciting business to be in, and one where people should be tracking how they can use and take advantage of those things.

The breadth of experiences we'll be delivering across these different devices is quite large. There will be multiple devices. The PC is where you'll be storing things and editing things, so [it still plays] a very central role. The PC will have different form factors. One that we'll highlight a lot today is this one called the Tablet form factor. This is the PC without the keyboard. So it's not quite as thin as a tablet, it's not quite as light as a tablet, it's not quite as inexpensive as a tablet, still we call it a Tablet PC. Why do we say that? Well, this has a pen. You just simply take this pen here, and you can take notes on the surface. And so if you see an article that's interesting you simply write an annotation and share that with your friends. You ought to read this, hey, did you see this, isn't this something we should act on, or do something about.

So with this kind of device, combined with the wireless networks that you're seeing become extremely pervasive, and these high speed connections, this changes the way things are done. Take somebody like Amazon. They're not involved in creating the Tablet PC, and yet they will be a huge beneficiary of the fact that when you have this capability at hand, when it comes to looking up a popular book or buying a book, that you choose to do it this way versus other ways.

Now, changes like this, the use of the Tablet for all these different activities, takes years and years to happen. The original bootstrap of this, a lot of it, will be - and we'll show this later - in meetings, where people can browse information and take notes and just be much more effective as knowledge workers.

Another fascinating question that all this technology is raising is, what is going to happen with advertising? That's a question on the Internet itself, it's a question on TV, where the PC of the future will be able to record shows for you and give you complete control over when you watch and how you watch different things. So there's the dedicated TiVo device and the PC, that whole role of marketing and how that's done, how targeted can it be, how can it be something that the watcher is interesting in seeing the ads, so that they're not using the technology to try and get around that.

So there's been a lot of twists and turns that have gotten us to this point. We made a little video that kind of captures some of the craziness and things that get us to where we are today. So let's go ahead and look at what we call "Behind the Technology."

(Video shown.)

BILL GATES: During those early Internet years, there was the question of the boundary between content and technology. And how would the world of content be changed by the Internet, that essentially allowed anyone to be a publisher. Just have a PC and simple tools, and you can put information out on the Web for people to read.

That sort of bottom-up publishing capability has really exploded in a certain way. Blogging [lets you] decide if, essentially, your regular diary being there, being accessible to everyone, is a very important thing. In these early years, Microsoft decided we wanted to make sure our technology was very strong for these applications. And the way we thought we'd understand how to do that was by doing a number of high volume Web sites ourselves. We did Expedia, which is a travel web site. That was just getting going in 1997. We did some city local information sites that later became part of City Search. And there was no boundary, because the software really was the key thing, inventing the way that you would keep a site like that, to perform, make it rich, was very much a state-of-the-art problem.

Now, as Expedia evolved, we got a clear sense of what was required technically, and we took those lessons and made that technology available to everyone, including people doing competitive sites. Expedia itself became a very good business, but I remember some period where the people who ran Expedia were coming in to Steve and I and saying things like, well, it's no longer about technology, we need to pre-book this cruise, or we need to book all these hotels and airplanes. And Steve and I started to say, wow, this is not something we know a lot about. You know, maybe this is not a business that belongs in the same management structure as state-of-the-art software does.

And so the story had a very happy ending in terms of how we spun off that activity and later it became part of USA Networks. So, you know, we actually made money doing that, but even more important for us, we learned how to make the product strong in a number of different ways.

We still have some content related activities, even though we're out of the city guides and Expedia. We still have the encyclopedia, called Encarta. We have our MSNBC, which is a joint venture web site that, by most measures, is certainly either number one or number two on the Web. We have our magazine, Slate, which was founded by Michael Kinsley. And all of those continue to be a source of inspiration for us. We're not, at heart, a content company in any way. We are a software company. Having those things, I think, has been very beneficial to us.

The online business is one that I think still has some deep questions. Are people willing to pay a subscription in the same way that they've been willing to in the non-online world? I think that's critical and necessary, because technology will move more and more people to online reading. And it won't be possible to view online activity as simply incremental to the print based activity. In fact, online not only will cannibalize both newspaper and magazines, but also will become the key vehicle for attracting in many of the new generation of readers. So making sure that the advertising models and the subscription models are strong on the Internet is very important. There are some examples, whether it's the Journal, Miami Herald trying new things, where people are pushing out in that direction. And I think that's very important.

We're seeing now that this is not just an issue about publications, even things like music and software are much more becoming subscription type offerings, as opposed to the physical box or disk offerings that they were in the past. So lots to be figured out here, including the technology that makes sure that the intellectual property is kept and protected in the right way.

So we have technology that's providing this great potential, and yet there's some values in terms of the editorial richness, design, things like that, that are important to carry over. And there's also some efficiencies that can be achieved by taking on basically an all-digital approach. We have been tackling this issue of why is reading off the screen less attractive than reading off of paper. And the first document that moved to be digital was the encyclopedia. That's a document where the ability to be up to date, the ability to navigate, to have sound and pictures, and to be less expensive argued in its favor going back, say, four years ago. Today in the encyclopedia business, the online and DVD versions dominate over the print versions. The print has become largely a cash-capped business of selling the year books that it in the print format -- is not the key thing. Fortunately, the online format does allow the ongoing updating of that material in a far more accessible and less expensive form that was possible before.

Well, how does that happen with other types of documents? The readability of the text, the resolution of the screen, and the ability to hold it in your hand. This idea that you can shift your gaze while you're doing immersive reading has turned out to be very critical. We, this year, with some of our Office products, will bring the quality of reading off the screen to a whole new level. Some of that is a very special technology we call Clear Type, some of it is simply learning exactly what the most comfortable display of the information is. So when people get electronic mail with an enclosure, less and less they'll be printing that out, and more and more they'll simply read that online. And if I take my readership habits over the last four years, they've shifted to where I read about 60 percent of information online versus on paper. So some things, like The Economist and other things, I read off of paper. But, something like the daily newspaper, including the Seattle Times, New York Times, and Wall Street Journal - because I like to have the information immediately available, and I like to comment and share with other people - I'm largely reading that online. Although, Sunday is the exception. On Sunday to some degree I read a little bit online, and a little bit off of the paper.

So the readership habits are going to change. All the things that drive this are moving quickly. Just take the LCD that I talked about, the resolution will move up by about a factor of four for the same price they are today over the next three to five years. So that is not going to be something that holds things back.

Now, trying to avoid having this online activity be something that divides people, the people who have and the people who don't, particularly for students, where you want to have these tools to pursue your curiosity and do homework, having accessibility we think is very important. Frank mentioned the libraries program, which was the software was done by Microsoft, and all the hardware and capital spending was done by the foundation to get 40,000 computers out in these libraries. And it's fascinating to talk with people about how they're using these things to do resumes, to stay in touch with relatives, to learn about things. All of our fears that it would just be used by kids to play games or other things proved to be unfounded. In fact, the librarians have been very enthusiastic, and has actually brought in younger kids, and helped them get those kids in there, and also encouraged them to check out books and read offline as well. So a very successful thing, and this is being repeated in many other countries. We have five countries that are actually doing the exact same thing right now.

Let's take a look at the Tablet and periodicals, and how those come together. And to show you that, I'd like to ask Gregg Brown, who is one of our senior program managers on the periodical team, to come out and show us how it goes.

GREGG BROWN: Thank you, Bill. What I'd like to share with you today is a demonstration vehicle that we did in conjunction with the New Yorker, to investigate the technology requirements, business requirements and production requirements, to bringing a magazine onto the Tablet. And this is a magazine, so of course it's available online and offline. You'll be able to read it in an airplane, and in your home, or where you might have wireless. So I'd like to talk to you about the key issues for us in a magazine are, of course, readability and usability. Can you read it - because it's an immersive reading environment - how is it as a platform for advertising, and can we provide the tools and technologies to support rights management, support production, support delivery of this magazine that fits into a publisher's workflow, which is weekly, monthly, daily?

Let me talk as a magazine, and as I said, the key thing for us is readability. So I can use my pen here to select an article, and we're working very hard on this text, and it's coming out very nicely. As Bill mentioned, the Clear Type, the technology we brought to bear, three-column, justified text, not a lot of rivers. These screens can make it look a little funky. But, I think it's quite readable even in the back of the room. It's a good environment for being able to get lost in a magazine, and being able to read it.

Editorial photography can really pop on this platform: not just in color, but in black and white. But, of course, because it is a computer, we can deliver online or offline elements that you can't do easily in the paper, and provide some depth content, provide some access into other information that people might want to find out about it.

Now, you may not realize, having read this whole article, who Billy Joel is. I mean, you may not be connecting Twila Tharp with Billy Joel, but it only takes a couple of bars of that message to know who Billy is. And now I've got to do a little something here to get rid of him.

Now, say you're a big Billy Joel fan, and you decide to buy the tickets. The clear thing is we need to really engage now. So there's an opportunity for commerce. So of course, we can drive directly to the opportunity to buy tickets for that show off of the editorial. So a linkage between editorial and purchase is the e-commerce proposition. But this, I think, is a great platform for advertising in general. "Going Around Town" is a very popular feature, particularly of course in New York, and we can integrate into this magazine format, the reading format, partial page ads that really grab the user.

Illustrations. Again, we can look through the excerpts of books, but if you come into an advertisement that appeals to you, it could drive directly to an online experience - if you're in an environment where you have wireless - drive directly into purchase products. We're also working on techniques to allow you to sort of partially purchase it, and come back when you're online again. So this direct advertising is, of course, a real strength of this kind of platform.

But, I also believe that this is a really strong platform for pure brand advertising, for just making a statement about the brand, getting the pictures up in front of the public and allowing them to see impressions of your brand, what you're trying to say, over and over again. And we can do that with a classic repurposing all of the magazine's great ad campaigns. Then of course, there are things we can do - again, because it's an electronic platform - that you have a hard time doing in a paper base. And that's creating an integrated campaign that involves the newspaper, the magazine, billboards and television. And what we did here was work with Audi to re-purpose some of their television ads.

(Video shown.)

GREGG BROWN: And all I can say is two members of our team have bought Audi convertibles since we started on this project. It's a very, very effective platform.

So that's what I wanted to share with you today. We're trying to work on the very practical aspects of how do you make reading really good, how do you make it a great platform for advertising. And though we didn't talk about this too much today, you'll see some more technology that's coming. How do you make it an easy thing to integrate into the production environment, to make it as a practical part of your publication.

Thanks a lot, Bill.

(Applause.)

BILL GATES: One of the technology advances that I'm sure you're hearing quite a bit about is this approach called XML, and it really grew out of the idea that information is a lot richer than the database world was able to handle. The database world was very focused on tabular information, lists of customers, lists of products, orders that people have made, lists of employees. But things like how you want to navigate it by searching it and understanding the structure, there was no good way to actually represent that. So XML was invented actually around 1997, but just starting to catch on.

Now, that has moved into the mainstream. And so, if you look at a company like Microsoft, the majority of the work we're doing, the software tools we're building, relate to this new standard. And so it's very exciting the progress that's taken place. In fact, ironically, the XML standard that really grew out of dealing with documents is now being used over in the data world for things like describing, say, a Boeing airplane, and all the different pieces that go into that, Because, again, that's a very heterogeneous thing, but yet you want rich data navigation around it.

So, XML has become very mainstream. All the Microsoft products are being built around this, and there's a way of connecting computers together, finding each other, exchanging XML, called XML Web Services. Why is this important to you? Well, it's important in terms of how your content gets organized so it can be repurposed in the maximum number of ways. It's important in terms of the operational efficiencies that you want to have in the newsroom. Whether it's handling a classified ad or handling editorials, the authoring tools for these things no longer require an IT department to be involved. The actual tools that the reporters, the managers are working with can understand XML.

So, a lot of the technology that we're building for the broad market - it's not specialized particularly to the newsroom - has very deep applicability to the newsroom environment. I think we can finally say that all of the specialized systems and software that were very expensive in the newsroom, and sometimes the companies involved with those would do something very creative, but then go out of business, the need to be off of the mainstream, is completely gone at this point. The mainstream in terms of its layout and richness, and communications tools is adequate for even the demanding special requirements that exist in the newsroom.

We do all of this work as part of our .NET strategy which says that all these devices should be able to connect together, and all the information should be available. The industry is just at the beginning of this XML revolution, including our part here. There's a lot of very healthy competition between ourselves and IBM, and some of the others, about who is doing the best job of this work, but the actual standards that will make it come together are very clear. The growth of our industry depends on getting these things in place, getting them to work for e-commerce and other activities. So, we're seeing a level of cooperation between the leading companies in the industry that's greater than ever before. Most notably between ourselves and IBM, but with many other people involved.

Now, let me move to the question of this online experience, and how distinctive can information be. And you've probably read that search engines like Google are basically synthesizing news pages and even local news type things by doing their kind of crawling. So that's kind of a threat that everything becomes monetized through that capability.

And the fact that things look fairly generic on the screen is reinforcement of that. Here, of course, I've taken away, and I'll go and add back in the chrome on the sides, and add back in the name, that's Chicago Tribune. Here, again, with the chrome eliminated, it's kind of hard to see who it is. Now, of course, that you have the title, that's the New York Times. Again, another one that's predictable, that's the Washington Post. But the text portion doesn't have the same distinctive character that it does in print. Magazines the same thing, that's U.S. News and World Report, which in print, of course, you think of as being fairly distinct in how it tells you those things.

So the question is, can technology do a better job of allowing you to share visual identity and that richness in the online format, and this is a research activity one of our top researchers, David Salesin, has been working on this, and he can show you where he is in providing tools that do this and make it work on lots of devices.

Welcome, David.

DAVID SALESIN: Thank you, Bill.

All right. What you see on your screen is how I would like US News & World Report to appear when I'm reading it on the Web. What you're seeing actually is a research prototype, and we've formatted an article in the style of US News & World Report for a Tablet PC-size screen. Now, you'll notice it has basically the same exact layout. You probably can't see this clearly, but the same layout as on the page. It has a drop cap, it has text that goes all the way across the page for the first two lines, and then it breaks into two columns format. Those lines of text are justified and flow around a central image. So, it looks just like in the magazine, and preserves all of the branding that you have there. It's also paginated, so I can run through the different pages, and I know just where to begin reading when I get to the next page. I don't have to scroll around and lose my page.

Also, what's more is that I can adapt this to a different type screen. So now, for instance, I might want to take my Tablet PC and put it on its side, and read the article that way. Well, the article will automatically format. Now we have a three-column version of the article, but it keeps the same basic style, the same branding as in the Tablet PC in the portrait mode. Also, you might notice that the image has changed. So, here we're using a tall image, but the editors, presumably, made available another version of that image which the layout engine could choose if it would work better at this size. This is also paginated, so the same kind of thing.

If we want to read it on a small palm-sized device, a PDA, well, it formats to that size device, and it also maintains the same kind of branding and appearance, and we can also do that in landscape mode as well. So, now we've got the same idea of one column of text across the top which breaks into two columns down below, a nice paginated reading experience, and so on.

Also, full-sized screens we can do. And here, instead of just seeing white space on the side of the screen, because the magazine wasn't formatted to handle that, it sort of effortlessly has a nice format that fits on that larger size display.

Okay. I want to show a little bit of how this is done, because the point that I want to get across is that this is easy for you to do. Basically, all you do is, you create once, just one time, a template, and then that template can be used again and again to make the content available week after week. So there's really no additional work beyond what you're already doing to put the content on the Web. So, here's just one story formatted in this style, and here's another story formatted in this style, here's another story formatted in this style. It's very simple to do this.

Now, the other thing I want to show you is that these styles are actually continuously adaptive. I can move this template window around, and the template adapts in a continuous way. And what I haven't shown you already is that so does the story. So, you can adapt the whole thing to any screen size at all if you like.

Now, to show you also this template is actually a live thing, let me go and edit it for you. So, I'm going to select this central element here, and I'll select the two rule lines that control its position. And I'm going to move it over to the left side. And, what's more, I'll make the image about half the column size. Now, I'll hit the S key, which will save this and then propagate it over to the actual layout on the left. Here it is. So you can see that I made an edit and it actually reflected in the style, and now this is reflected in all the articles I might want to show.

Here's another example. This is The New Yorker magazine again, and one of the things that you'll notice, if I go to page three, to the end of the article, is that there's some blank space at the end of the article, and this is something that layout editors go to some pains to avoid by adding in little bits of artwork, and ads, and so on, in order to make the text come right to the very bottom of the page. We can do this automatically. So, here for illustration purposes, the illustration is fairly large, but you can see that if I page through the document, and now I've added these two little bits of artwork so that the text appears right to go to the bottom of the page. And just to show you this isn't like a canned thing completely, let me just make it some other arbitrary size here. Let's see, I don't know, let's say this size, arbitrary size, and I'll paginate it again. And hopefully it will be able to find some artwork that will make it go right to the bottom of the page.

It always happens in a demo, doesn't it, that it won't work. Let me try one more time. Occasionally, the artwork may not be available, you know, to have it go just right to the bottom of the page.

You wouldn't believe how many times I practiced it, and it worked every single one. OK. So here it's added this big image up here, and if we sort of page through you'll see then they added that image, and that made me go right to the bottom of the screen.

All right. I'd like to close with one more demo that we put together, actually just for this crowd. Here is The New York Times, and here we have it formatted for the Tablet PC in portrait mode. I can also format it for a Tablet PC held the other way in landscape mode. And, again, it's continuously adapted, so I can resize this thing, and we see it adapting the article, adapting the number of columns, adapting the art work, all the way down to two columns, or all the way up to a full screen experience. If I hit the Enter key, it will go full, full screen. And so the idea is, this is how I want to read my newspaper every morning. I want to see it formatted for whatever device I happen to be looking at. Also, a nice thing about doing this with the computer is that if I want I can change the font size. So for someone who has a little difficulty reading you can make it larger, or larger still, or even if you don't have difficulty reading it, if you're in a darkened room or something, it's handy to be able to make the font size larger or small again.

So in summary, there are a lot of different devices these days that you might want to read your newspapers and magazines on, all the way from cell phones, to PDAs, to Tablet PCs, to laptops, to desktops, your wall size displays. And the technology we're working on provides the ability to maintain your branding on all these different size displays, and everything in-between, and to deliver it at no extra cost to you beyond what you're already paying to put the content on the Web.

Thank you very much.

(Applause.)

BILL GATES: The dynamic layout he was showing there, we're very excited about it. It's been one of the top problems in computer science, is how do you make that very flexible, and yet very, very easy. The theme for today is that we see the online newspaper as one where it takes all the strengths, the editorial strength, the visual strength of the paper-base, and then adds in new capabilities, whether that's the linking, interaction with the reader, a lot of the things that we've pioneered with Slate, and other people have pioneered, shows that the online publication can have some very unique features. And it's that combination along with the brand that maintains the strength that the traditional paper has always had.

Now, the whole process of gathering the news should be improved, as well. You know, in particular, say you want that audio interview to be up on the Web site, to go with the article itself, but you don't want to have audio specialists going along with your newspaper reporters. In fact, in the future you'd like that reporter to be able to gather the images, the text, the audio, all of those things in a very efficient fashion. And so the newsroom and the reporters are another good example of what we call a big knowledge worker challenge, how do you get and share information, particularly where the deadlines are very tight, how do you coordinate those activities, and what can the devices look like to work in a more agile way?

We'll have these pocket-sized devices, the evolution of what's the phone or the PDA today. Those have been separate devices, but those will come together. And on that device, things like having your calendar, seeing alerts, being able to filter out the things that are important to you, that technology will be there. Not a very good reading or note taking device, and so that's where the Tablet device comes in. And those two things need to work together in a very deep fashion. And so, unlike the way some people position this, where phones are competing with PCs, it's quite the opposite. There are really good scenarios where these things work together. For example, somebody in a remote bureau calls up an editor, you should be able to bring the article up on both those screens and sit and talk, and edit together in a simple fashion. And so most phone calls will not just be voice, they'll be voice plus screen, talking to somebody about what their ad is going to look like, that will be voice plus screen, where you can bring up the ad, talk about it, talk about the placement, and have more than just that voice conversation.

So the way that knowledge workers everywhere do their job, we see is going to be very different. If you have an editorial meeting, you want to record that digitally, so that somebody in a remote site can go back and search that, or listen to that, that will become so inexpensive and so easy, and automatic, that the idea of archived digital meetings will just be commonsense.

I'm going to give you a little bit of a glimpse of how we see these advanced tools helping the journalists, and particularly with a new piece of software called OneNote. I'd like to ask Bobby Moore, who is a product manager in our Office group, to come up and give us a look at that new technology.

Welcome, Bobby.

BOBBY MOORE: Thanks, Bill.

Microsoft Office OneNote is a digital note taking application. Our research shows that about 91 percent of U.S. adults today actually do take notes in some form. So by a show of hands, how many people have actually taken notes at some point in their life? That's pretty much what our research shows. And looking at journalists specifically, we notice that there are really two types of note takers. First of all, we have digital note takers who do a lot of things in terms of searching their notes, reusing the content, taking that content and sharing it with their colleagues. And at the same time we have paper note takers who have the flexibility of pen and paper, they're able to write anywhere on the screen. They don't have to worry about saving their notes or anything along those lines. So what we really thought was there was an opportunity to create an application that combines the best of both worlds. And so OneNote basically takes the flexibility, allows you to capture information in a lot of different ways, and then provides what we like to call marketing speed, the efficiency of digital content. That basically means the ability to very easily search through that content, reuse that content, and share that content with others.

Now, this is an example of OneNote. And with OneNote, we really embraced this idea of a physical notebook. And so with OneNote we have what we consider to be a digital notebook, along the top of the screen you'll notice that we have notebook tabs, and each notebook tab has a set of page tabs. So imagine, for the same of the scenario, I'm a journalist. I've done some interviews with a couple of individuals from Microsoft, and today I'm going to do an interview with a guy named Bobby Moore, who supposedly knows a little bit about note taking.

We've captured an agenda, we've also captured some questions that we'd like to have answered in this interview, such as the number of note takers, how can I get more information on the product, and is this product just for the Tablet PC. But, we know that note takers like to take notes in a very unstructured way. So, for example, I could be I could have a question about, or a thought about needing to go to the grocery store, I need to get some eggs, I need to get milk, I need to get break. And we notice that note takers really take very unstructured notes in this way. So on OneNote I can just click anywhere on the screen and just start typing.

Now, let's assume that at this point I'm actually prepared to start the interview, and let me come to a dilemma that we noticed that many journalists have, and other note takers, as well, which is you're listening to a speaker, and you basically have a decision to make, do you really, really want to pay very close attention tot he speaker, or do you really, really want to take very in-depth notes. So we think that we have a feature that actually addresses that issue, which is this idea of audio notes. So I can take the audio recording, and I can just start to record, and I can plug up a USB microphone, or I can also have a headset. In the case that I'm a journalist doing a phone interview, I can actually plug the phone directly into my Tablet PC. In this particular case I can actually just start the interview.

Now, let me take a step back, and we'll get back to the audio a little bit later, but let me talk a little bit about inking in OneNote. Now, inking in OneNote allows me to create and capture information that's very, very similar, and you can handle that information similar to the way you handle typed information. I can add rule lines, which is going to make me a much more efficient writer. And I can say, you know, this is a OneNote demo, and I had questions about the number of note takers, and I know that that's going to be 91 percent. I had a question about how you can get more information, you can actually go to the Web site, and that web site is going to be www.microsoft.com/onenote, that's really a shameless plug for you guys to visit the web site. Then I can also talk a little bit about the Tablet PC, and one thing to mention is that OneNote is actually a great product, not just on the Tablet PC, but also on desktops and laptops, but with the tablet you get the extra inking and handwriting recognition functionality. And then I could suggest that in my discussions with Bobby Moore, he talked a little bit about audio.

Now, let me show you some of the things I can actually do with this ink, now that I've captured this. I can highlight this inking content, and I can do things like create a numbered list. Once I've captured the numbered list I can do things like indent this information, Windows is very intelligent about how it handles that information. I can even capture this inked information and add that into the area where I've had typed information. So, again, a very intuitive way of dealing with inking, a very intuitive way of dealing with inking and type at the same time.

But, now let's return back to this idea of audio notes. Now, literally what's been happening while I've been talking into this microphone, OneNote has been synching the information I've captured with the audio. Now, what that means is, let's say I need to go back and remember what that web site was that Bobby mentioned, I can click on this audio icon, and I guess first I should probably stop this recording. I can click on this audio icon (audio clip.)

So, a very interesting way of tying audio to the notes that you've captured. And you noticed that as that audio progressed, it would actually highlight the information that you captured. So now, as a journalist, for example, I no longer have to carry around my little handheld recorder, and then fast forward and rewind if I want to really find the information that I'm looking for. I can just go back and look at my notes and find that audio link, and just play the information back from that particular point. It's really, really a great innovation we think for journalists as well as students, for example.

Now, let's go back a little bit and talk a little bit about how we handle HTML, because Bobby Moore actually did give me this Web site, I can go in and do something called create a new side note. What the side note is going to do is, it's going to allow me to do things like Web research. And the analogy that we have here is, as a notetaker, you might flip through a magazine, and you might see an article that you like. Well, you don't carry the whole magazine around with you just because you found one article. You literally might cut that article out and paste that into your physical notebook. And we have the HTML equivalent with OneNote. So, I can just highlight the HTML information, I can drop that inside of my little side note, and when I open this up, you can actually see that this is really just the complete version of OneNote. But when you shrink it down, it gives you just the interface that you need. And you'll notice here that I've captured the HTML, and I've also captured the URL of the information, so that if I actually need to go back to that Web page, I'll just select this URL and it will take me back to the correct spot.

Now, returning back to the interview, another thing that I really might like to do with this information, now that I have all this information in one place, is search through this content and reuse some of this content. So, I remember that I had a picture of a Tablet PC somewhere in my notes, and I remember that I typed the word "tablet," but I can't remember exactly where that information is. Well, I can just go up to my search box, hit the search on the word "tablet," and you'll notice here on the notes that I've actually already taken, it's captured this search query, not only the typed query, but also the handwritten query. And then I can open up this search pane, which is going to allow me to navigate through all the different links, and all the different returns on this search query. And I've actually found this picture. Now I can just copy this picture, and OneNote gives me intuitive back and forth navigation similar to what you'd expect on a Web page. And I can return here, and I can just very easily paste that information.

And now, inside of my notes, I actually have all the information I need to go back and write my story up, but I also might want to share this with colleagues. And, again, if you think about pen and paper notetaking, this actually means that you need to go back to your machine, type up your notes, and then send it away in email. Well, in OneNote, you just go to this little email button, you click, and with your integration with Outlook 2003, we can just email this information from right inside the application.

So, what that means is, if I'm sending this to a user of OneNote, they can just take this application and then start to manipulate these notes. If you're not a user of OneNote, the body of the content of the mail will actually be captured in HTML mail, so you can actually still view that information.

So, again, what have I showed you? You've seen how you can very intuitively capture information via type, capture information via handwriting, you can also capture HTML and pictures. You can reuse that content via search, and then you can also share that information with colleagues. And that, again, we think is going to be the power of OneNote, which is the ability to capture all your notes in one place.

(Applause.)

BILL GATES: Thank you.

We love doing fun demos of new technology. Our commitment is that we're going to keep increasing our R&D to build these tools, they're tools of empowerment. People will think of meetings and communications in very different ways in the rest of this decade, because of the software and hardware advances, and the way that those go together. People are underestimating these things, that's fine, we love having them be proved out as they actually get out into the marketplace, and create a phenomenon around that.

In terms of your business, we do think that in a very measured way, you know, not like some people would have thought in the heyday, there's no overnight change taking place, but there's a gradual change, and an important change that embracing digital approaches can help you view those as an opportunity. The processes inside the newsroom, the way that you collaborate with other organizations using these XML approaches, the way that the individual reporters do their job, and the experience you create for users, we're going to be navigating, for the foreseeable future they'll be using online in some cases, and using the offline in other cases. So we're excited to be able to help you as you move forward on that journey.

Thank you.

(Applause.)