Indeed, it wouldn't be long before that industry would disappear. At that time it was just starting to take over from the floppy disk as a way to distribute software. He also saw that the CD-ROM software business would be 'dramatically affected by the Internet'. He also predicted that faster broadband internet speeds would allow people to speak to each other via video chats. He correctly said that 'virtually every PC will be used to connect to the Internet and that the Internet will help keep PC purchasing very healthy for many years to come'. Gates's memo made a lot of predictions that became true. It is even more important than the arrival of the graphical user interface (GUI).

The Internet is the most important single development to come along since the IBM PC was introduced in 1981. In this memo I want to make clear that our focus on the Internet is crucial to every part of our business.

Now I assign the Internet the highest level of importance. I have gone through several stages of increasing my views of its importance. Gates felt that those factors meant that the rise of the internet and its effects on the PC hardware and software industry would not just have a big impact on Microsoft, but perhaps the biggest impact on the company ever: Gates stated that a combination of factors, including the increased use of the PC, better internet infrastructure, and faster online networks, would help reduce the cost of internet connections for both businesses and consumers. Gates' memo was titled simply The Internet Tidal Wave, and it remains one of the most famous business memos in history.

Netgates