Microsoft plans to add between 4,000 and 5,000 jobs in its 2004 financial year and increase spending on research and development to about $6.9 billion, the company said Thursday.The bulk of the new jobs, between 3,000 and 3,500, will be in the U.S., Microsoft said in a statement released at its annual financial analyst meeting. The boost in research and development spending represents an increase of about 8% over last year, the company said. Microsoft ended its 2003 fiscal year on June 30.Microsoft is just at the beginning of what it can do with software, Microsoft Chairman and Chief Software Architect Bill Gates told financial analysts at the company's Redmond, Wash., headquarters."We have really just scratched the surface in terms of the scenarios that software can enable," Gates said. "The things we want to do require substantial investments, things that could not be done by companies with just a few hundred developers."Gates gave an overview of the dot-com boom and bust and asked himself the question he said many financial analysts have asked him: Has the state of the economy stifled innovation at Microsoft? It has not, Gates said. The hardware advances Microsoft needs to innovate keep "coming at full speed," he said.These hardware advances include wireless networking, improved displays and the advent of broadband, he said.Helped by new hardware, Gates sees several areas for Microsoft to provide breakthrough technology in the next six years. He listed those on a slide: Internet with Web services; dynamic data center and desktop management software; monitoring and feedback tools; unlocking business information; Trustworthy Computing; and better e-mail, with sharing.Gates hammered on Trustworthy Computing as key. "That's a piece we have got to get right or else the others won't matter," he said. Trustworthy Computing is a Microsoftwide initiative to focus on security launched by Gates in January last year.Talking about e-mail, Gates, the world's wealthiest college dropout, shared some of the spam he receives: one e-mail hawking college degrees, another a scheme to get out of debt quick. However the crowd really chuckled when a third message appeared on screen: "Are you frustrated about legal concerns? Get protection from top law firms for just pennies a day."On stage, Microsoft staffers demonstrated the new Outlook 2003 e-mail client with a connector to make it work with MSN e-mail and corporate e-mail systems, allowing users to view their various inboxes in one client and combine and share calendars. This Outlook connector is due out later this year with a new version of MSN, Microsoft said.The online conferencing services of PlaceWare, a privately held company acquired by Microsoft earlier this year, also got prime placement. Gates participated in a demonstration with JJ Cadiz, program manager for Real Time Collaboration at Microsoft.