Microsoft to boost R&D spending, hire 5,000 more

By Reed Stevenson

REDMOND,Washington: Microsoft Corp. has announced its plans to boost spending on research and development by 20 percent to $5.2 billion in the current fiscal year while boosting head count by 10 percent. Microsoft also plans to add 5,000 employees to its 50,000-plus work force, officials said.

"We are increasing the level of investment for the future," Bill Gates, chairman and chief software architect told analysts. The announcements came as the software giant kicked off a meeting for financial analysts at its Redmond, Washington headquarters.

In his presentation to the analysts, Gates outlined Microsoft's strategy over the next few years, saying the software giant would look to migrate customers over to Web-based computing and services, its broad .Net initiative. Gates also reaffirmed Microsoft's efforts to move away from the personal computer and into software for a wide range of devices, including cell phones, hand-held devices and interactive television.

"Ten years ago I said (interactive TV) was important," Gates told analysts. "Ten years later I still say it's important. How much money have we made? A big negative number." The meeting with analysts came a week after the No. 1 software company reported results for its June-ended fiscal year with a 7 percent gain in annual earnings on a 12 percent rise in revenues.

Growth in sales of its latest platform, Windows XP, and software for businesses was offset by write-downs on Microsoft's investments in the cable industry in it Q4. The company's shares were off more than 6 percent at $43.45 on the NASDAQ, where it was one of the most active issues.

© Reuters