US Report: Gates urges governments not to meddle
Published: 01 Feb 1999 17:07 GMT
"I think it would be a tragedy if any government action held companies back in terms of doing more advanced products," the head of the software giant said at the World Economic Forum's annual meeting. "Certainly in the case of my company, we are going to do everything to continue our culture, which is having these products with more integrated features, and trying to stay ahead of what is a very exciting business," he said.
During a panel discussion, he said: "I think it is very important for companies -- even successful companies -- to keep driving the pace of innovation very rapidly." He said the industry was "intensely competitive" and this had been beneficial. While the price of the products had come down, research and development investment was rising dramatically. Meanwhile, the power of the products themselves was increasing. "Certainly that is the framework that everybody wants. That is what governments want, and what consumers want," he said.
On Sunday in Davos, Gates warned that Internet stock valuations were "breathtaking," the Financial Times newspaper said. "I don't recommend Internet stocks to people who don't like massive risk, especially at current levels. People are jumping into it like it's a gold rush," Gates told reporters. But the head of the world's largest software company said he had held the view for over a decade that high-tech companies were valued surprisingly highly.
"So obviously the view that they were going to go down didn't prove out. In the long run, will I be right? I think so." He said higher prices would make it harder to justify acquisitions -- "but I'm not saying we (Microsoft) won't participate in this frenzy a little bit." "(Technology stocks) should be selling on lower multiples than ordinary companies because this business is changing so rapidly, and as a consequence it is impossible to predict an earnings stream into the future," The Independent quoted him as saying. Gates' warnings follow similar ones by News Corporation chairman Rupert Murdoch and U.S. Federal Reserve chairman Alan Greenspan.
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