Redmond, Washington cannot match the charms of Cambridge, England, according to the Pacific North West's most famous resident Bill Gates.

Chris Nuttall reports for Europe Direct

Asked about the difficulty of attracting good staff to come and work for Microsoft, the chairman told the European IT Forum in Paris that his company had to be increasingly creative.

"We opened up our research centre in Cambridge because there were a set of researchers we just could not entice, no matter what we did, to move back to our headquarters," he said.

"And so having a base in Europe, that's going to draw on a lot of companies here that's going to be a nice new thing for us."

Microsoft has invested £47m in a research laboratory in Cambridge.

Mr Gates said a research and development centre would also be set up in Asia some time in the next year: "There's a couple of sites we're trying to pick between."

Surfing chez Bill

Asked about his new home on the shores of Lake Washington, he said he had been in for about nine months and was living the Web lifestyle with a 45mb connection.

"It's kinda fun to play with it and get a grip of what will be mainstream in the future."

Other thoughts of chairman Bill from the conference:

• Computers will soon see, listen and learn: "We feel we are only two years away from Windows software advances on this."

• "The network computer is pretty discredited". Having everything in the same language (Java) is a "pretty mythical" concept, he said, given the differences being developed by Sun, Oracle, IBM and Netscape.

• Microsoft's top two competitors would be IBM and Sun, he said, but added that IBM did not have an architectural initiative and Microsoft was benefiting immensely from the vacuum. The biggest challenge was posed by Microsoft's own installed base - it had to persuade customers that migration to new products was worthwhile.

• Microsoft's Internet content sites, such as its Start portal and Carpoint and Expedia services, would only ever be 0.001 per cent of websites out there, he said. A few were actually starting to break even, but several hundred million dollars in revenues a year meant it would not be a big part of Microsoft's business.