The internet will revolutionise television within five years. That was the prediction of Microsoft chairman Bill Gates at the World Economic Forum in Davos, Switzerland.

“I’m stunned how people aren’t seeing that with TV, in five years from now, people will laugh at what we’ve had,” the Microsoft chairman told politicians and business leaders.

“Certain things like elections or the Olympics really point out how TV is terrible. You have to wait for the guy to talk about the thing you care about or you miss the event and want to go back and see it,” he said. “Internet presentation of these things is vastly superior.”

He said the change was coming “because TV is moving into being delivered over the internet — and some of the big phone companies are building up the infrastructure for that.”

Microsoft has had some success in signing up telecommunications companies to use its software to deliver audio and video, but worldwide only a few million customers currently receive television over internet technology.

The rise of broadband video delivered over the internet has been more spectacular, but for most people it is still not currently a substitute for watching television.

It is not the first time that Bill Gates has predicted that broadcasting will become irrelevant. Back in October 2004 we reported that he said that linear schedules were on the way out.

Chad Hurley, the co-founder of YouTube was also speaking at Davos. He said that the impact on advertising would be profound and that YouTube would be experimenting to build an effective model that works for advertisers and users.

He also confirmed that the company, now owned by Google, is working on a revenue sharing mechanism that would reward users that submit material to which they own the copyright.