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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: blankmind who wrote (24248)	6/16/1999 6:15:00 PM
From: William Hunt	Respond to of 74651

blankmind ---the real discussion on productivity and it's future---June 16, 1999 Gates Says He Expects Further Gains In Productivity Through Technology By JOHN R. WILKE Staff Reporter of THE WALL STREET JOURNAL WASHINGTON -- Microsoft Corp. Chairman Bill Gates told a congressional panel that the burst of productivity growth brought by computers is just beginning. "We will absolutely see productivity increases coming out of the use of technology for many years to come," Mr. Gates said. "We are very much at the beginning of what can be done," he said, predicting that "in the next five years, we will make radical progress in the business sector." Mr. Gates spoke to the Joint Economic Committee a day after Federal Reserve Chairman Alan Greenspan told the same panel that "something special has happened to the American economy in recent years" because of computerization. But Mr. Greenspan also warned that technology's effect on productivity "can't increase indefinitely." Increasing productivity lets wages rise and the economy grow faster without triggering inflation. While computers have been around for years, the economy-wide pace of productivity growth didn't quicken until the mid-1990s; some economists say that is because businesses are linking computers into networks, making them more efficient. Some Echoes of Greenspan Mr. Gates said he agreed with Mr. Greenspan's caution. "Chairman Greenspan is pointing out that some of the valuation may not continue to go up at the rate they've gone up," he said, referring to stock prices. "And if you take a long view, there will be some ups and downs in terms of the psychology of those valuations. But underneath that, the efficiencies and benefits to consumers will continue to advance," Mr. Gates said. Mr. Gates applauded "the light hand of government" in regulating high-technology industries, saying that "the framework we have in the U.S. encourages competition." He referred only indirectly to the government's antitrust suit now pending in federal court a few blocks away. In response to a question about antitrust and government interference in technology, he said, "The laws as they are currently written are fine," though he saw some room for "tweaking." Briefly addressing a main point of the lawsuit, he said that one of the freedoms companies have is "integrating new features in" products. "That kind of freedom has been upheld again and again, whether it's for large companies or small companies," he said. A crucial issue in the case is whether Microsoft illegally placed its own Internet browser into its dominant Windows software in order to hurt a rival browser maker. Pitches for Legislation Mr. Gates also pitched a number of legislative initiatives sought by technology companies: changes in tax policy to support research; protection for companies from lawsuits seeking damages over year-2000 computer glitches; and changes in immigration laws to allow more skilled foreign workers to come to the U.S. Mr. Gates also backed giving U.S. companies greater flexibility to export encrypted software, saying that "the industry is losing a lot of sales" to foreign competitors. In recent weeks, some senators have studied bringing all these issues together in omnibus technology legislation. In the House, Majority Leader Dick Armey announced Tuesday what he called an "e-Contract" package of bills for the technology industry, modeled on the "Contract With America" approach used in 1994. A spokeswoman for Mr. Armey said that in addition to the technology issues already under consideration, the Texas Republican would like to "modernize" antitrust laws for today's high-tech markets. "The barriers to competition in technology are lower, and the industry is changing faster than antitrust cases can be pursued," she said. The legislation has nothing to do with the Microsoft case, she added. Mr. Armey, whose former chief of staff now works for Microsoft, had lunch with Mr. Gates and other Republican leaders Tuesday shortly before announcing the "e-Contract." Mr. Gates's appearance was a triumph for Republicans, who have benefited from large political contributions by Microsoft and its political action committee in the year since the antitrust suit was filed. Traditionally, Democrats -- especially Vice President Al Gore -- have been better at winning contributions from technology companies. BEST WISHES BILL