Gates addressed 1,000 advertising professionals at Microsoft's Strategic Account Summit saying, "...newspapers will go online, and there will be massive innovation that comes out of that. We're saying that TV, the biggest ad market in the world, will completely go online and have the kind of targeting interaction that you only get out on the Web today. As dramatic as things happening on the Web are, that's actually what all advertising ... will be in the future."

Gates speech comes at a time when Microsoft, alongside newspapers and other traditional media, is fighting to claim its stake in the already huge, yet continually blossoming Internet advertising realm, a fight which caused some to speculate that the software company would make a bid to take over Yahoo, the main rival of Google, the most successful Internet advertising company.

It's also not the first time that Gates has made these predictions. In April 2007 he warned attendees at the Inter American Press Society that younger generations will have completely different media and life habits all focused on digital. In March 2006 he announced that paper was "no longer a big part of my day."

This time around he mentioned his relations with the newspaper industry: ""I have a lot of friends in the newspaper industry and, of course, this is a tough, wrenching change for them, because the number of people who actually buy, subscribe to the newspaper and read it has started an inexorable decline." 

Although Gates voiced his opinion that the traditional advertising model would collapse over the next five years, The Seattle Times quoted CEO of the Universal McCann advertising agency, David Cohen, who said, "The timeline between now and  (the transition to traditional media) I think is questionable. I know that the newspaper industry is definitely going through an evolution, but ... there's still a tremendous amount of circulation in some of these markets."

Sources: The Seattle Times, CNET, The Globe and Mail