By Tim Weber BBC News Online business editor in Davos

Spammers - senders of bulk e-mail that mostly offers dubious products or pornography - were innovative, he said.

However, a three-pronged strategy would soon stamp out the problem, he said in remarks at the World Economic Forum (WEF) in Davos.

He hailed search technology firm Google as a "great company"; its approach reminded him of Microsoft 20 years ago.

Microsoft's chief, estimated worth $46bn, is the US' richest man

But he also predicted that Microsoft search technology would soon outpace that of its rival.

Mr Gates, by now a fixture at the annual WEF's meeting of business leaders and top politicians, said a lot of progress had been made during the past year to stop spam e-mail.

"Lots of mail you get is from people on your contact list. So what's the problem? Strangers!"

Filters could do a lot to sort spam from real mail, Mr Gates said: "Does the e-mail say it's about 'enlargement' - that might be spam."

But by adding random words in subject lines and replacing text with pictures, spammers were trickier to catch and in the long run filters would "not be the magic solution".

Spam will soon be a thing of the past Bill Gates How Microsoft aims to make spammers pay

More promising were "human challenges" - forcing the sender to solve a puzzle, or the computer sending the e-mail to do a simple computation.

"That's easy for a machine sending a few e-mails, but gets very difficult and expensive for a computer sending lots of spam," Mr Gates said.

But ultimately, Mr Gates predicted, spam would be killed through the electronic equivalent of a stamp, also known as "payment at risk".

This would force the sender of an e-mail to pay up when an e-mail was rejected as spam, but would not deter senders of real e-mail because they could be confident that their mail would be accepted.

"Microsoft is pursuing all three approaches, and spam will soon be a thing of the past," Mr Gates asserted.

Google vs Microsoft

Asked whether Microsoft missed the boat in the field of search technology, Mr Gates admitted that he had to take the blame for losing out to Google.

"We took an approach that I now realise was wrong," he said.

"Our strategy was to do a good job on the 80% of common queries and ignore the other stuff."

Mr Gates claimed that Microsoft was better on the 80% of common queries, although Google was "pretty good" as well.

We have gained good credibility... and shown that we are hardcore about this business [Xbox video games]." Bill Gates

"But that's not what counts. It's the remaining 20% that counts... because that's where the quality perception is."

Google was "way better", he said, for people investigating a rare disease, exploring a hobby, or searching for a specific restaurant.

He praised the "high level of IQ" at Google's research team, but said "we will catch them".

X marks the box

In his wide-ranging remarks, Mr Gates described the first generation of his company's Xbox video games console as a "pretty good first shot", that would allow it "to play again".

Gates and his wife have set up a charitable foundation

"We are a fairly strong number 2 to number 3, and a weak number 2 to number 1. But we have gained good credibility... and shown that we are hardcore about this business."

Game software makers were now taking Microsoft seriously, and the next Xbox generation in two or three years' time would be "mind-blowing".

The future of computing

And anyway, in a decade from now, "we will laugh at personal computing as we know it".

In a world of "seamless computing" everything would be digital, flexible and personalised, and driven by software not hardware.