Microsoft chairman Bill Gates believes that Internet firms are experiencing a "mini bubble" – but unlike the dot-com bubble, this one will not burst.

Gates told an audience at Microsoft's annual online advertising conference: "We are back in a mini-bubble era in terms of people expecting a lot of these valuations, but I don't think we'll see the same amount of exits the way we did," according to a report on Cnet.

Gates predicted: "Companies such as Amazon, eBay, Yahoo and Interactive are here to stay, but over time the boundaries of what those businesses do will get fuzzier."

The Cnet report notes recent filings for public offerings by several dot-com companies, suggesting that stocks in Net search companies are hitting new heights.

Gates also spoke of his vision of the future of technology, centred on the digital home, networked devices and "seamless computing."

Other topics covered included delivering the Internet and data into the home. Gates said: "To remain competitive, cable companies will have to ensure their bandwidth increases and their packages are attractive. The two dark horses with a path into the home are powerline technology and… wireless technology for last mile, like 802.16 or WiMax."

He also spoke of the importance of software packages that sit on top of Internet access, predicting that the future will bring technology that easily recognizes handwriting or voice commands.