Bill Gates
1955–

Cofounder and chairman, Microsoft Corporation

Born: October 28, 1955, in Seattle, Washington.

Education: Attended Harvard University, 1973–1975.

Family: Son of William Henry Gates II (attorney) and Mary Maxwell (teacher); married Melinda French (Microsoft manager), January 1, 1994; children: three.

Career: Lakeside Programming Group, 1968–1969, founder; Traf-O-Data, 1970–1973, founder; Microsoft Corporation, 1975–, founder and chairman; 1975–2000, CEO; 1992–1998, president.

Awards: U.S. National Medal of Technology, 1993; Chief Executive of the Year, Chief Executive, 1994; President's Medal of Leadership Award, New York Institute of Technology, 1995; Louis Braille Gold Medal, Canadian National Institute for the Blind, 2002; Knight Commander of the Order of the British Empire, 2004.

Publications: The Road Ahead (with Nathan Myhrvold and Peter Rinearson), 1995; Business @ the Speed of Thought, 1999.

Address: Microsoft Corporation, 1 Microsoft Way, Building 8, North O, Redmond, Washington 98052-6399; http://www.microsoft.com.

■ William Henry Gates III cofounded the Microsoft Corporation in 1975, built his software company into the one of the most successful businesses in the world, and established himself in the process as the world's richest man. Although Bill Gates started Microsoft as a small business based on a single innovative software program that he had helped to develop, his real genius was his business acumen. As the long-time CEO of Microsoft, Gates was able to borrow and integrate other computer programmers' innovations and sell them to a new and rapidly expanding home computer market. In 1985, 10 years after Microsoft was founded, it had $140 million in revenue, which grew to $28 billion by 2002. One of the pioneers of home computing, Gates proved himself to be a technological visionary and software applications guru. According to industry analysts, he also demonstrated that he was a shrewd marketing strategist as well as an aggressive corporate leader.

A PRECOCIOUS PIONEER

Gates grew up in a prosperous area of Seattle, Washington, with his parents and two sisters. The son of a lawyer and a schoolteacher, Gates attended a public grade school and then the Lakeside School, a private college preparatory institution. It was at Lakeside that he first became interested in the relatively new field of computer programming, met his friend and future business partner Paul Allen, and developed his first computer software program at the age of 13.

In 1968 the Lakeside School was still purchasing computer time on a machine owned by General Electric, as computers were extremely expensive in the late 1960s. Gates and his friends from Lakeside became fascinated with the machines and formed the Lakeside Programmers Group to try to make money in the computer field. The Programmers Group primarily earned its founders free computing time on machines owned by a company in Seattle. Gates and Allen then formed a company that they called Traf-O-Data. They put together a small computer for measuring traffic flow and made about $20,000. The company remained in business until Gates and Allen graduated from high school. Although Gates was interested in computers, he enrolled at Harvard University with the intention of becoming a lawyer like his father. By the time he was a sophomore in 1975, however, Gates was more interested in computers and electronics than in his pre-law studies.

What became the Microsoft Corporation grew out of two college undergraduates' bluff and bravado. Gates's old friend Allen showed him an advertisement for a kit to build a home computer. The two called the computer's manufacturer, MITS, saying that Gates had taken a primary computer language called BASIC and adapted it for the machine. When MITS expressed interest, Gates and Allen ignored their studies and spent the next four weeks frantically working on turning their boast into reality. In an interview in Money, Gates later recalled, "One little mistake would have meant the program wouldn't have run. The first time we tried it was at MITS, and it came home without a glitch" (July 1986).

Having written the first computer language for a personal computer, Gates and Allen established the Microsoft Corporation in 1975. The name "Microsoft" was formed from the words "microcomputer" and "software." Gates then dropped out of Harvard in 1976 and focused on building the new business. He believed that there was a market for computer software and that the market was going to expand rapidly as affordable computers were developed for home use.

RIGHT PLACE—RIGHT TIME

Although Gates rightfully earned credit for building one of the fastest-growing and most profitable companies ever established, Microsoft started out on a shaky foundation. Gates and Allen had sold their first commercially developed software for $3,000 and royalties. Before long, however, Microsoft found itself unable to cover its overhead. Even though Gates and Allen received royalties, their software was also pirated by computer hackers. This piracy led Gates to write an "Open Letter to Hobbyists," which said that computer software should not be copied by the then relatively small computer community without the developer's permission. Gates also recognized at this point in time that the future of computer software lay in owning a standard software package to be used on most computers.

By the late 1970s the computing giant IBM had plans for marketing a personal computer for home use. They approached Microsoft to develop the standard operating system for their home computer models. Gates and Allen then went out and purchased for $50,000 an operating system called Q-Dos, which had been developed by Seattle Computer. Q-Dos was compatible with the Intel processor that IBM intended to use. The two then adapted the Q-Dos system and presented it to IBM. Money magazine quoted Gates as recalling, "We bet all our resources on that system" (July 1986).

Gates had learned well his early lessons in the software business. He insisted that IBM make Microsoft the exclusive software licensee for their home computers, meaning that all IBM products would have Microsoft operating systems. Furthermore, Gates negotiated a contract that allowed Microsoft to retain the right to manufacture and license the software, which he and Allen had named MS-DOS, to other manufacturers. Because there were three other operating systems for microprocessors at that time, Gates didn't own the sole industry standard. But he was well on his way. He and Allen made MS-DOS the most attractive system to computer manufacturers because Microsoft offered a flat-fee license rather than a per-unit contract. Gates and Allen also encouraged software developers to create programs that would broaden their system's capabilities. Their strategy was a huge success because manufacturers initially saved money. In addition, the software developers had an easier job designing such single applications as word processing for use on computers made by other manufacturers.

These negotiations demonstrated that Gates was willing to defer immediate earnings for much greater future profits. His plan was based on building a mass of users for Microsoft products, which would mean the company would own the industry standard. Once Gates's company owned the standard, it could then revert to selling its software at per-unit prices rather than general licenses.

While the contract with IBM placed Microsoft on its way to legendary business growth, it also established a precedent for what some considered Gates's unsavory business practices. When he and Allen had approached Seattle Computer, the software's original developer, they omitted to mention that they were in negotiations with IBM to develop their operating system. Seattle Computer later sued Microsoft on the grounds that it had hidden its relationship with IBM in order to purchase Seattle's system at what turned out to be a bargain-basement price. The two companies came to an out-of-court settlement without Gates or Microsoft admitting to any guilt or duplicity in the original purchase.

MARKETING TRUMPS CHALLENGERS

Paul Allen, who had been serving as Microsoft's head of research and new product development, left the company in 1982 after being diagnosed with Hodgkin's disease. The following year, Gates faced a major challenge to Microsoft's domination of operating systems for home computers when a company called VisiCorp developed a mouse-driven computer system with a user interface based on graphics rather than the keyboard-based and text-driven system of MS-DOS. Gates quickly recognized that VisiCorp's system would be the wave of the future because it was much easier for technologically unsophisticated people to use. Even though Microsoft did not have such a system in the works at that point, Gates started an advertising campaign with an announcement at the Plaza Hotel in New York City that a new Microsoft operating system with graphical user interface (GUI) would soon be marketed. This next-generation system was to be called "Windows."

Gates's announcement was a bluff; the truth was that Microsoft was nowhere near developing such a system. But the marketing ploy worked because people preferred to wait for a system designed to be compatible with their existing Microsoft products rather than undergo the trouble and expense of installing an entirely new operating system. Furthermore, Windows allowed users to avoid buying new software applications to replace the DOS-compatible programs they currently owned. Windows 1.0 was finally released in 1985. That same year Microsoft reported $140 million in revenue, including $46.6 million from overseas users.

Microsoft's growth continued to be relatively smooth in spite of several challenges, in part because the fiscally conservative Gates had financed most of the company's expansion entirely from its earnings. This cautious approach to financing, however, did not reflect an unwillingness to take risks. In January 1986 Gates launched an ambitious long-term project to develop a new data storage system based on a compact disk, or CD-ROM, that could hold any type of computer file, including music and visual files. In March of that same year, he took the company public. His 40 percent ownership of Microsoft shares made his net worth $390 million by June 1986.

Gates had effectively cornered the market for operating software for the vast majority of personal computers (PCs) as well as developing a wide range of other popular programs. He effectively became a billionaire in March 1987, when his company's stock rose to $90.75 per share, up from $21.50 per share when the company went public. Brian O'Reilly commented a few months later in Fortune, "[Gates] apparently has made more money than anyone else his age, ever, in any business" (October 12, 1987).

GATES SWITCHES GEARS

Industry analysts had praised Gates for guiding his company on a path of growth that saw its revenue stream increasing by more than 50 percent per year in a extremely competitive, even cutthroat, market. They credited much of this success to Gates's ability to capitalize early and effectively on industry trends and his willingness to take risks on such fledgling technologies as Microsoft's CD-ROM-based software packages, which became industry standards. Furthermore, Gates had organized the company's structure so that it worked concurrently on all phases of a software product's business cycle from development to distribution. Larry Michels, an early software developer, told Mary Jo Foley of Electronic Business, "Other software vendors have modeled themselves after the hardware business. Microsoft created its own model of how to do business" (August 15, 1988).

Although Gates had established himself as a visionary, he did not always hit the mark. For years he had paid little attention to the business potential of the Internet, which led him to say later that he regretted not having focused more closely on Microsoft's capabilities for e-mail and networking. In 1995, however, he did an about-face and began to redirect the company's efforts in this area. His success was measured by the fact that Microsoft's Internet Explorer Web browser had become the industry leader by 2000. Gates's success in developing a competitive Internet browser, as well as coming out on top of the desktop-database and office-suite wars of the 1990s, proved that he had formed a company nimble enough to jump into a market that others were developing and take the lead away from the competition.

In 1998 Gates announced a new phase in Microsoft's expansion that would allow him to concentrate his energies on strategy and product development. At the same time the company funneled larger amounts of money into improving customer support and feedback. Gates planned to direct the company's work in such areas as intelligent telephones and television, as well as the integration of such new computer input techniques as speech, vision, and handwriting. Although Windows had already gone through several upgrades, Gates wanted to continue improving its ease of use and reliability. To free himself up for this work, he stepped down as president, a position he had held since 1992, but remained Microsoft's chairman and CEO.

SHOWDOWN WITH THE GOVERNMENT

Microsoft earned $19.75 billion in revenue during the fiscal year 1999. Bill Gates had become an icon not only in the computer and business worlds but also in the eyes of the general public. His ghostwritten book The Road Ahead, which outlined his vision of the future, topped many best-seller lists for more than three months. In spite of Gates's financial and literary success, however, he found himself facing his biggest challenge yet as the 1990s came to an end.

The challenge came this time from the United States government rather than from Microsoft's competitors. Gates and Microsoft had come under increasing scrutiny for unfair business practices from the time of the court case that followed Microsoft's purchase of the Q-Dos operating system from Seattle Computer in 1980. In 1993 the U.S. Justice Department began an investigation into Microsoft's contracts with other computer manufacturers that led to an agreement from Gates in 1994 to eliminate some of Microsoft's restrictions on the use of its products by other software makers. In 1997, however, the Justice Department sued Microsoft for forcing computer makers to sell its Internet browser as a condition of using the Windows system—a de facto violation of the 1994 consent decree. In December 1997 a U.S. district judge issued a preliminary injunction forcing Microsoft to temporarily stop requiring manufactures who sold Windows 95 "or any successor [program]" to install its Internet Explorer.

Microsoft appealed the injunction, but the following year the Justice Department and 20 state attorneys general sued Microsoft, charging that it illegally thwarted competition to protect and extend its software monopoly. Although Microsoft won its initial appeal in 1998 to reverse the 1997 decision, Gates soon found himself being questioned for 30 hours over a three-day period in a videotaped deposition for the upcoming antitrust trial. The government finally rested its case on January 13, 1999, and the Microsoft defense team ended its case on February 26. The final oral arguments from each side were presented on September 21, 1999.

After the judge presented his findings of fact on the case on November 5, Gates issued a response disagreeing with many of the findings that went against Microsoft. In a statement released to the press as reported by Court TV Online, Gates noted, "Microsoft competes vigorously and fairly. Microsoft is committed to resolving this case in a fair and a factual manner, while ensuring that the principles of consumer benefits and innovation are protected" (November 6, 1999).

U.S. District Judge Thomas Penfield Jackson ruled in June 2000 that Microsoft was a monopoly which had illegally exploited the dominance of Windows, at that point installed on over 95 percent of the world's personal computers. Judge Jackson then ordered Microsoft to be broken up into several smaller companies. It was the most severe antitrust ruling since the breakup of AT&T in 1984. Jackson's decision was reversed on appeal, however, and the company received a far less severe punishment directed toward restricting some of its business practices. In spite of this relatively favorable outcome, however, Gates continued to battle competitors in American courtrooms over Microsoft's business practices. In addition, he found himself subjected to litigation in Europe, where Microsoft was once again accused of exploiting its monopoly of Windows to control other computer-related industries, including media-player and server software companies.

Despite the controversy over whether Gates had created a company that used its dominance of the desktop computer system to obtain unfair control of newer computer-related markets, Microsoft continued to prosper. Gates stepped down as CEO in 2000 but kept his position as chairman of Microsoft as well as its chief software architect. In 2004 he doubled the company's research and development budget to $6.8 billion and began pushing a new Windows personal computer operating system code-named Longhorn.

MANAGEMENT STYLE: WORKAHOLIC

Although Gates was long known as a "boy wonder" in the computer and business worlds, his management style was anything but immature. As was noted in a BBC News article, "Gates has come to be known for his aggressive business tactics and confrontational style of management" (January 26, 2004). Although he was considered a charismatic leader within his own company, he was also extremely tough—he fired Microsoft's first company president after only 11 months on the job.

An intense businessman who typically put in 16-hour days and took only two three-day vacations in the first five years after establishing the corporation, Gates was demanding and strong-willed about implementing his vision. Coworkers, clients, and industry analysts also remarked, however, that he did not surround himself with yes-sayers but was more than willing to change his mind if someone convinced him of a better alternative. Analysts also observed that one of the keys to Gates's success was his ability to focus on the fundamentals of the business while keeping office politics or his own ego from getting in the way. "Most of what I do is leading," Gates once said in Electronic Business. "Managing applies to the people who work directly for me" (August 15, 1988).

Gates was known from the beginning of his career as the epitome of a hard-driving businessman respected by his allies and feared by his competitors. It was his vision that guided Microsoft's immense success. In addition, Gates had an uncanny ability to tackle both the managerial and technical sides of Microsoft's operations. He was especially noted for his success as a marketing strategist who priced his products for the mass market rather than computer specialists. In 1999 the Journal of Business Strategy listed Gates among a handful of people who had the greatest influence on business strategy over the last century.

Gates also had his fair share of critics. In addition to accusations of predatory and possibly illegal business practices, some analysts remarked that Gates did not really foster in-house product innovation but tended to focus his attention instead on blocking advances by other companies.

On the other hand, supporters of Gates's managerial style and business acumen pointed out that Microsoft continued to prosper even in the midst of the 2002 information technology slump, growing at 20 percent each quarter and posting a phenomenal 35 percent after-tax profit margin. Despite all his financial success, however, Gates remained a fiscal conservative. He was renowned for his penny-pinching traveling habits, demanding that his schedule be filled for the entire day when he was on the road promoting his company.

NO TIME TO REST

Gates was still the world's wealthiest person in early 2004, with a personal fortune estimated at $60.56 billion. He remained a hands-on leader at Microsoft, however, maintaining an active work schedule as the company's chairman and chief software architect. As noted by Ron Anderson in Network Computer, "… no doubt his presence [at the company] will make itself known well into the decades ahead" (October 2, 2000).

In addition to extending Microsoft's success, Gates also turned his attention to philanthropy, including the establishment of the Bill and Melinda Gates Foundation. Gates and his wife endowed the foundation with $24 billion to support philanthropic initiatives in the areas of global health and learning. For example, Gates made plans in February 2004 to donate $82.9 million for research to develop a new vaccine against tuberculosis. In addition to his duties at Microsoft and his efforts in philanthropy, Gates sat on the board of ICOS, a company that specialized in protein-based and small-molecule therapeutics.

See also entry on Microsoft Corporation in International Directory of Company Histories.

sources for further information

Anderson, Ron, "Top 10 Most Influential People: No. 2—Bill Gates," Network Computing, October 2, 2000, p. 51.

"Bill Gates' Response to Microsoft Decision," Court TV Online, November 6, 1999, http://www.courttv.com/archive/business/1999/1106/gates_ap.html.

Foley, Mary Jo, "Boy Wonder: Microsoft's Bill Gates," Electronic Business, August 15, 1988, p. 54.

"Interview: Bill Gates Opens Up," PC Magazine, February 24, 2004, N/A.

O'Reilly, Brian, "A Quartet of Hi-Tech Pioneers," Fortune, October 12, 1987, p. 148.

"Profile: Bill Gates," BBC News, January 26, 2004, http://news.bbc.co.uk/go/pr/fr/-/1/hi/business/3428721.stm.

Schlender, Brent, "On the Road with Chairman Bill," Fortune, May 26, 1977, p. 72.

"Sir Bill and His Dragons—Past, Present, and Future—Microsoft," Economist (US), January 31, 2004, p. 68.

"Strategists of the Century," Journal of Business Strategy 20, no. 5 (September 1999), p. 27.

Tuhy, Carrie, Richard Eisenberg, and Greg Crouch, "Software's Old Man is 30," Money, July 1986, p. 54.

—David Petechuk

William Henry Gates III

Microsoft cofounder and Chief Executive Officer William (Bill) H. Gates III (born 1955) became the wealthiest man in America and one of the most influential personalities on the ever evolving information superhighway and computer industry.

William (Bill) Henry Gates III became the most famous businessman in recent history. His supreme accomplishment was to design and develop innovative software for the personal computer, making PC's universally popular machines. In user friendly language, communicating with computers is a matter of "translating" a person's native language into the codes that a computer understands. The easier this translation is to make, the easier it is to work with the computer and the more accessible and widely used the computer becomes. Gates' gift for software design, as well as his skills in business, made Microsoft, the company he cofounded with a high school friend in Richmond, Washington, a multi billion-dollar empire.

Love of Computer Technology

Gates was born on October 28, 1955 in Seattle, Washington. He was the second child and only son of William Henry Gates Jr., a prominent Seattle attorney, and Mary Maxwell, a former school teacher. Gates had two siblings. His sister, Kristi, one year his senior, became his tax accountant. Libby, nine years his junior, lived in Seattle raising her two children. Although Gates' parents had a law career in mind for their son, he developed an early interest in computer science and began studying computers in the seventh grade at Seattle's Lakeside School. Lakeside was a private school chosen by Gates' parents in the hopes that it would be more challenging for their son's intellectual drive and insatiable curiosity. At Lakeside Gates became acquainted with Paul Allen, a classmate with similar interests in technology who would eventually become his business partner.

Gates' early experiences with computers included debugging (eliminating errors from) programs for the Computer Center Corporation's PDP-10, helping to computerize electric power grids for the Bonneville Power Administration, and founding with Allen a firm called Traf-O-Data while still in high school. Their small company earned them $20 thousand in fees for analyzing local traffic patterns.

While working with the Computer Center's PDP-10, Gates was responsible for what was probably the first computer virus, a program that copies itself into other programs and ruins data. Discovering that the machine was connected to a national network of computers called Cybernet, Gates invaded the network and installed a program on the main computer that sent itself to the rest of the network's computers and crashed. When Gates was found out, he was severely reprimanded and he kept away from computers for his entire junior year at Lakeside. Without the lure of computers, Gates made plans in 1970 for college and law school. But by 1971 he was back helping Allen write a class scheduling program for their school's computer.

The Article That Started It All

Gates entered Harvard University in 1973 and pursued his studies for the next year and a half. However, his life was to change in January of 1975 when Popular Mechanics carried a cover story on a $350 microcomputer, the Altair, made by a firm called MITS in New Mexico. When Allen excitedly showed him the story, Gates knew where he wanted to be: at the forefront of computer software design.

Gates and Allen first wrote a BASIC interpreter for the Altair computer. BASIC was a simple, interactive computer language designed in the 1960s. "Interpreter" describes a program that executes a source program by reading it one line at a time, performing operations one line at a time, and performing operations immediately. MITS, which encouraged and helped Gates and Allen, finally challenged them to bring their software in for a demonstration. Because they did not own an Altair (nor had they seen the 8080 micro processing chip that was at the heart of the machine), Gates had to write and test his BASIC interpreter on a simulator program which acted like the 8080. Nonetheless, their BASIC ran the first time it was tested at MITS.

Gates dropped out of Harvard in 1975, ending his academic life and beginning his career in earnest as a software designer and entrepreneur. At this time, Gates and Allen cofounded Microsoft. They wrote programs for the early Apple and Commodore machines and expanded BASIC to run on microcomputers other than the Altair. One of Gates' most significant opportunities arrived in 1980 when he was approached by IBM to help with their personal computer project, code name Project Chess. Eventually asked to design the operating system for the new machine, Gates developed the Microsoft Disk Operating System, or MS-DOS. Not only did he sell IBM on the new operating system, but he also convinced the computer giant to shed the veil of secrecy surrounding the specifications of its PC so that others could write software for the machine. The result was the proliferation of licenses for MS-DOS as software developers quickly moved to become compatible with IBM. Over two million copies of MS-DOS were sold by 1984. Because IMB's PC architecture was opened up by Gates, MS-DOS and its related applications can run on almost any IBM-compatible PC. By the early 1990s, Microsoft had sold more than 100 million copies of MS-DOS, making the operating system the all-time leader in software sales. For his achievements in science and technology, Gates received the Howard Vollum Award in 1984 by Reed College in Portland, Oregon.

In 1987 Gates entered the world of computer-driven multimedia when he began promoting CD-ROM technology. CD-ROM is an optical storage medium easily connected to a PC, and a CD-ROM disc has an incredibly larger capacity that can store encyclopedias, feature films, and complex interactive games. Gates hoped to expand his business by combining PCS with the information reservoirs provided by CD-ROM and was soon marketing a number of multimedia products.

Gates' competitive drive and fierce desire to win has made him a powerful force in business but has also consumed much of his personal life. In the six years between 1978 and 1984 he took a total of only two weeks vacation. In 1985 a popular magazine included him on their list of most eligible bachelors. His status did not change until New Year's day 1994 when he married Melinda French, a Microsoft manager, on the Hawaiian island of Lanai. The ceremony was held on the island's Challenge golf course and Gates kept it private by buying out the unused rooms at the local hotel and by hiring all of the helicopters in the area to keep photographers from using them. His fortune at the time of his marriage was estimated at close to seven billion dollars. By 1997 his worth was estimated at approximately $37 billion, earning him the "richest man in America" title.

In Hard Drive, James Wallace and Jim Erickson quote Gates as saying, "I can do anything if I put my mind to it." His ambition has made him the head of a robust, innovative software firm and the richest man in America.

The Future for Microsoft

Gates emits the same competitiveness, drive, ambition, and need to win that was present 21 years ago when he dropped out of Harvard to start Microsoft. But some of the players have changed. Allen left Microsoft to become one of the country's most successful hi-tech venture-capital investors and owner of the Portland Trail Blazers basketball team. However, he returned to serve on Microsoft's board. Gates considers Steve Ballmer, a former Harvard classmate, his best friend and closest advisor. He hired Ballmer away from Proctor & Gamble in 1980 with the lure of a $50 thousand a year salary and a share of the business. In an interview with Newsweek, Gates is quoted as saying, "I think it's a phenomenal business partnership … And within the company, everyone has understood that we work very closely together and have a very common view of where we want to go." Gates shared his vision for the future of Microsoft with Information Outlook. Gates said, "We're in four businesses today, and in ten years we'll be in the same four businesses; desktop operating systems, productivity applications, server software, and interactive content business." He believes that speech recognition, natural language understanding, automatic learning, flat screen displays, and optic fiber will have the greatest technological impacts on the industry over the next 15 years.

Many of Gates' detractors criticize him not just for his success, but because they feel he tries to unfairly and may be even illegally leverage his company's dominance of the desktop operating systems. Once Microsoft integrates its Internet browser, Explorer, and its Microsoft Network into its Windows Operating Systems, it will have the ultimate— Active Desktop—due out with Windows 97. Critics feel it will put all other entries at a disadvantage. "If improving a product based on customer input is willful maintenance of trying to stay in business and not have Netscape turn their browser into the most popular operating system, then I think that is what we are supposed to do," was Gates' response to his critics as quoted by Time.

Gates and his wife had their first child, Jennifer, in April of 1996. Although many describe Gates as cold, relentless, and impersonal, his friends find him more reflective since his marriage and the birth of his daughter. Further, he recognizes his overall contribution. While he appears a little less exhausting and more civil, friends say he still pushes hard and keeps score.

Gates expects to run Microsoft for at least the next ten years at which time he plans to retire and focus on giving his money away. His philanthropic endeavors have been guided by his interests. He has directed those efforts primarily toward educational sources such as schools and libraries.

Further Reading

Since 1981 business magazine articles have described aspects of Gates' career. Gates: How Microsoft's Mogul Reinvented an Industry—and Made Himself the Richest Man in America by Stephen Manes and Paul Andrews (1994) is an authoritative and detailed biography. Big Blues, The Unmaking of IBM by Paul Carroll (1993) favorably compares Gates' entrepreneurial approach to business to IBM's management by committee approach. "E-Mail From Bill" by John Seabrook, New Yorker magazine (January 10, 1994) provides insight to Gates' goals and personality. Architects of the Future, Microsoft Corporation 1993 Annual Report contains product descriptions and market share analysis along with income statements and a discussion of litigation and federal agencies' inquiries. PC Week provides updates on the latest Microsoft products.

For books about Bill Gates see: Encyclopedia of Computer Science, Van Nostrand Reinhold, 1993 p 519. Gates, Bill with Nathan Myhevrold and Peter Rinearson, The Road Ahead. Ichbiah, David and Susan L. Knepper, The Making of Microsoft, Prima, 1991. Manes, Stephen and Paul Andrews, Gates, Doubleday, 1993. Slater, Robert, Portraits in Silicon, MIT Press, 1987. Wallace, James and Jim Erickson, Hard Drive, Wiley, 1992.

For periodical articles about Bill Gates see: The Future of Microsoft. Economist, V327, May 22, 1993, pp. 25-27. Information Outlook, May 1997. National Review, January 27, 1997. New York Times, January 3, 1994. New Yorker, January 10, 1994, pp. 48-61. Newsweek, June 23, 1997. PC Magazine, March 25, 1997. Time, January 13, 1997. □

Bill Gates
1955-

Chairman of microsoftcorporation

Microsoft

Critics' grievances notwithstanding, William Henry "Bill" Gates III has compiled an impressive resume. Born in 1955, Gates and his two sisters grew up in Seattle, the children of William Henry Gates II, an attorney, and Mary Gates, a schoolteacher, regent of the University of Washington, and chairwoman of United Way International. Gates began programming computers at the age of thirteen. In 1973 he entered Harvard University, where he developed the programming language BASIC (Beginner's All-purpose Symbolic Instruction Code) for the first microcomputer, the MITS Altair. In 1975, during his junior year, Gates left Harvard and moved to Albuquerque, New Mexico, to head a company that he called "Microsoft." In 1978 the company, now spelled minus the hyphen, relocated to Seattle, Washington. As of 1999 the Microsoft Corporation, with a market value of $546 billion, was the wealthiest company and tenth largest economic entity in the world. For the fiscal year ending in June 1999, Microsoft posted revenues of $19.75 billion. Gates credits his own "foresight and vision regarding personal computing" as essential to the success of Microsoft and the entire software industry. Yet, his management and technical expertise have not escaped the scrutiny and fire of critics. In their biography, titled Gates, Stephen Manes and Paul Andrews characterize Gates the corporate manager as intolerant, abrasive, and dismissive. He cut corners on labor costs and was "tightfisted beyond the boundaries of the law."

Big Break

Gates's big break came in 1980, when Microsoft acquired the right to license the 86-DOS that Seattle Computer had developed. Gates renamed it MS-DOS and offered a package deal to IBM that included it and all the computer languages that Microsoft had acquired in exchange for advances, royalties, and licensing fees. Executives at IBM agreed; all IBM and IBM-compatible PCs carried Microsoft software. This transaction, asserts cultural historian Jackson Lears, one of Gates's main critics, exemplifies the essence of the man behind Microsoft. For all his technical expertise, Lears wrote, Gates "is more a salesman than an inventor. Nearly all of Gates's major achievements have involved appropriating the innovations of other people, then brilliantly mass-producing and marketing them. The vendor of virtual reality, Gates is the perfect business hero for a postmodern era."

William the Conqueror

Napoleon Bonaparte was among Gates's boyhood idols. Driven by a persistent desire to master the economic world, just as Napoleon was driven to master the military and political worlds, Gates built his own Grand Empire, only to see it assailed from all sides. If the Department of Justice gets its way, he may yet see it dismantled. Like Napoleon, too, critics charge, Gates pretends to be, or perhaps actually thinks of himself as being, egalitarian and democratic. Napoleon codified and extended the liberty, equality, and fraternity of the French Revolution but ruled Europe as a dictator. Gates, apparently filled with an egalitarian and democratic fervor, posits a Utopian future in which technology will enrich and empower everyone. Yet, as many critics maintain, Gates yoked this vision to an irresistible and irreversible technological determinism. In Gates's view, the democratization of power is arising from a worldwide network of personal computers that have created what he calls a "digital nervous system." He asserted in The Road Ahead and Business @ The Speed of Thought that the old, undemocratic, hierarchical social, political, and economic structures cannot withstand the new, democratic, egalitarian force of the digital age, For Gates, the attachment to the past is as unbearable as it is unacceptable; it stands not only in the way of technological, but also social and political, progress. He seems to assume that all Americans are, will be, and want to be connected, trading in Internet stocks, and building McMansions. He does not seem to realize, according to his adversaries, that 67 percent of U.S. household incomes are stagnant or declining, and that 50 percent of Americans have no assets at all. Gates's vision of the future, his critics suggest, may therefore amount to democracy for those who can afford it, actually masking the growing economic, social, and political disparities between the rich and everyone else.

Gates the Philanthropist

As of 1999 Gates was worth at least $87.5 billion. His 18.5 percent stake in Microsoft accounted for $76 billion, while his personal fortune amounted to $11.5 billion and counting. Of that latter figure, $5 billion is in Gates's personal investment portfolio. Gates divided the remaining $6.5 billion between two huge foundations, the William H. Gates Foundation and the Gates Learning Foundation, set up to fund charitable and philanthropic work. In 1999 Gates and his wife, Melinda, also launched the Bill and Melinda Gates Foundation, endowed with more than $17 million, to support philanthropic initiatives in global health, especially in the Third World, and in education, especially in the inner cities and low-income communities of the United States and Canada. By the end of 1999 it had committed more than $300 million to these causes. Gates is also determined that every classroom and public library in the United States be connected to the Internet, There is little doubt that his philanthropy sprung from good intentions and noble motives, and that many benefits will come to those who are the recipients of his largess. Again, however, critics have accused Gates of acting out of self-interest, In giving away computers to schools, libraries, and community centers, they hasten to point out, Gates has ensured that these institutions will be in need of Microsoft technology. Moreover, given the federal antitrust case against Microsoft, which generated months of bad publicity. Gates needed to do something to boost his popularity and revive his reputation. Paying for vaccinations for children in Zimbabwe or scholarships for students in East St. Louis brought him the kind of benign, even generous, recognition that he sought and removed, albeit temporarily, the negative attention from the front page.

The Visionary

Gates likes to talk about the future. As the decade drew to a close, his own future and that of Microsoft remained in doubt. On 7 June 2000, in the most severe antitrust prescription since the breakup of AT&T in 1984, U.S. District Judge Thomas Penfield Jackson ruled that Microsoft was a monopoly and ordered it be split into two companies. What the ruling means for Microsoft is ultimately less interesting than what it means for Gates's vision of the future, as he is not merely marketing an assortment of technologies, but marketing a way of life. Gates advocates what he calls "friction-free capitalism" in which society will achieve commercial harmony and democratic autonomy through the application of technology. The Internet, Gates insisted in The Road Ahead, will offer individuais unlimited options and will put them in charge of managing these alternatives. He wants to give "people the power to do what they want, where and when they want, on any device." Gates has an enduring faith that people can systematically and efficiently control their everyday lives with technology. His many critics have declared, however, that for all his talk about choice, democracy, and equality, Gates is an authoritarian who simply cannot admit that there will be winners and losers in his technophilic vision of progress, any more than he can imagine life beyond the Net or fathom that some people might not wish to work, play, and live solely in cyberspace.

Sources:

"Bill Gates," Microsoft, Internet website.

Adam Cohen, ""Microsoft Enjoys Monopoly Power,"' Time, 154 (15 November 1999): 61-69.

Amy Cortese, "The Battle for the Cyber Future," Business Week (1 June 1998): 38-41.

Bill Gates, Nathan Myhrvold, and Peter Rinearson, The Road Ahead (New York: Viking, 1995).

Gates and Collins Hemingway, Business @ the Speed of Thought: Using a Digital Nervous System (New York: Warner, 1999).

Jackson Lears, "Unsweet Smell of Success," New Republic (18 October 1999): 29-38.

Stephen Manes and Paul Andrews, Gates: How Microsoft's Mogul Reinvented an Industry—And Made Himself the Richest Man in America (New York: Doubleday, 1993).

Michael Moeller, "Remaking Microsoft," Business Week (17 May 1999): 106-114.

Gary Rivlin, The Plot to Get Bill Gates: An Irreverent Investigation of the World's Richest Man—and the People Who Hate Him (New York: Times Books, 1999).

Andy Serwer, "One Family's Finances: How Bill Gates Invests His Money," Fortune, 139 (15 March 1999): 68.-86.

Jon Swartz, "Microsoft Split Ordered," USA Today, 8 June 2000.

"Visionaryin-Chief: A Talk with Chairman Bill Gates on the World Beyond Windows," Business Week (17 May 1999): 114-115.

Dori Jones Yang, "The Empire Strikes Out," U.S. News & World Report, 127 (15 November 1999): 46-53.

GATES, WILLIAM HENRY 1955-

Software developer

Entrepreneur

William Henry Gates is a study in contrasts. He has shaped one of the most successful American companies of the last few years, but in many ways he seems atypical of the successful businessman of the 1980s. In an era when pinstriped suits and power ties were signs of success, Gates has often been characterized as a nerd, and at times he seems to epitomize the stereotype of the computer nerd with great technical skills but little in the way of social skills.

An Early Start

Gates, the son of a successful Seattle lawyer, dropped out of Harvard University after his junior year to form Microsoft with Paul Allen and Rie Wieland. Gates and Allen grew up together in Seattle, and both shared an interest in computers. While still in high school, Gates and Allen formed a small programming company called Traf-O-Data that analyzed traffic patterns. They met with some success, and the software company TRW offered Gates and Allen $20,000 a year to work in software development. Gates took a year off from high school to pursue the work and then, at the age of seventeen, he entered Harvard University.

Ambition

Gates believed that the future of computers lay in desktop computers and, in particular, he saw the future in the software that those computers would need to function. In January 1975 Bill Gates read the cover story of Popular Electronics that featured the Altair micro-computer that sold for $350. Gates and Allen used the Harvard computers to write a version of BASIC that would operate the Altair since the Altairs were not yet available. Allen sold the BASIC version to Ed Robert, the MITS founder who built the Altair. In 1975 Gates dropped out of Harvard to form the Microsoft Corporation with Allen. Within a few months Gates and Allen were writing programs for Apple and Commodore. Microsoft did well for the first five years, selling the original BASIC and a variety of other computer languages. The truly big break came in 1980 when IBM involved Microsoft in its Project Chess, the IBM effort that produced the IBM Personal Computer, IBM asked Gates to design an operating system for the new computer since no existing system would work on the new computer. After the company went public in 1986, Gates's estimated wealth was $390 million. Initially Microsoft provided IBM with DOS, which IBM sold under the IBM label. In 1984 MS-DOS was being used in 2 million computers and in more than 90 percent of the IBM personal computers and IBM compatible equipment. Gates also helped design software for Apple and for Radio Shack. Microsoft doubled in size every year during its first nine years.

Windows of Opportunity

Despite Gate's unwillingness to dress and act the part in public, he has proven to be one of the most aggressive and competent businessmen of the 1980s. An even bigger success for Bill Gates and the Microsoft Corporation came with the development of Windows. Windows is a graphical interface that allows computer users to operate a DOS-driven machine without using the DOS programming commands. The Windows software is modeled after Apple's Macintosh operating system, with the key difference being that the Apple system is a graphically based operating system and the Windows software is simply a covering for the DOS operating system. Nonetheless, the Windows system made personal computers easier to use and cleared the way for the IBM-style computer to dominate the market.

Sources:

Paul Carroll, Big Blues: The Unmaking of IBM (New York: Crown, 1993);

Tracy Kidder, The Soul of the New Machine (Boston: Little, Brown, 1981);

Robert Slater, Portraits in Silicon (Cambridge: Massachusetts Institute of Technology Press, 1987);

James Wallace, Hard Drive: Bill Gates and the Making of the Microsoft Empire (New York: Harper Business, 1993).

Gates, William H., III (1955–), computer software developer, businessman.Born in Seattle, Washington, Bill Gates attended one of the few secondary schools in America that had access to computers at the time. He later attended Harvard College but left before graduating. Gates and his friend Paul Allen learned of the invention of the Altair Personal Computer (PC) in 1975. Recognizing the potential market for PC software, they developed the BASIC program for the Altair. Moving to Albuquerque, New Mexico, where the Altair was produced, they incorporated their firm, Microsoft. In 1979, they moved the company to Seattle. Gates married Melinda French in 1994.

Challenging the amateur tradition of software development, Gates argued that unless software authors could recover their costs, they would have no incentive to provide high‐quality software. In 1980, Microsoft won the contract to develop the operating system for the new International Business Machines (IBM) PC. Because IBM, unlike other PC manufacturers, used an open architecture in its machine, and because a number of other firms copied the IBM machine and used its operating system, this arrangement gave Microsoft a vast and elastic market. By 1990, as the dominant firm in the PC operating‐systems market, Microsoft was expanding its product line by developing or acquiring applications software. Because of its market dominance, it also influenced the design of applications packages developed by other vendors. By the end of the decade, Gates, a billionaire many times over, had become the richest person in the world. The Bill & Melinda Gates Foundation, established in 1999 with assets of around $5.4 billion, initially focused on promoting computer and Internet access, global health, children's issues, and projects concerning the Pacific Northwest.

In 1998, the Justice Department brought an antitrust suit against Microsoft for allegedly using its control of the operating‐systems market to promote its own Internet Web browser and to prevent other companies from entering the market. In June 2000, federal district judge Penfield Jackson ruled that Microsoft had violated the antitrust laws and should be divided into two companies. Microsoft appealed, and the case continued.
See also Antitrust Legislation; Automation and Computerization; Computers; Internet and Worldwide Web; Philanthropy and Philanthropic Foundations.

Bibliography

Stephen Manes and and Paul Andrews , Gates: How Microsoft's Mogul Reinvented an Industry—and Made Himself the Richest Man in America, 1993.
Bill Gates , The Road Ahead, 1995.

Robert W. Seidel

Bill Gates (William Henry Gates 3d), 1955–, American business executive, b. Seattle, Wash. At the age of 19, Gates founded (1974) the Microsoft Corp., a computer software firm, with Paul Allen. They began by purchasing the rights to convert an existing software package. In 1980 they agreed to produce the operating system for the personal computer being developed by International Business Machines (IBM). That system, MS-DOS (Microsoft Disk Operating System), and subsequent programs (including the Windows operating systems) made Microsoft the world's largest producer of software for microcomputers.

In 1997 the U.S. Justice Dept. accused Microsoft of violating a 1995 antitrust agreement, because the Windows 95 operating system required consumers to load Microsoft's Internet browser—thus giving Microsoft a monopolistic advantage over other browser manufacturers. In late 1999 the trial judge decided that Microsoft was a monopoly that had stifled competition, and the following June he ordered the breakup of Microsoft into two companies, a decision that Microsoft appealed. Although the appeals court overturned (2001) the breakup, it agreed that Microsoft had stifled competition and returned the case to a lower court for resolution. Subsequently the government and the company agreed to a settlement that placed some restrictions on Microsoft but would not essentially diminish the advantage its operating system monopoly gave the software giant; several states contested the settlement, but a judge approved it in 2002. In the European Union the company has also faced scrutiny over anticompetitive concerns, and there it has several times been fined hundreds of millions of euros.

Gates, who is chairman of Microsoft, is one of the wealthiest persons in the world. In 1994 he founded the William H. Gates Foundation (focusing on health issues in developing countries) and in 1997 established the Gates Library Foundation, later renamed the Gates Learning Foundation (providing education assistance). In 1999 the former was renamed the Bill and Melinda Gates Foundation , and the latter was merged (2000) into it. In 2008 Gates, while remaining as company chairman, withdrew from daily participation in the running of Microsoft in order to devote more time to the foundation. He has written The Road Ahead (1995, with N. Myhrvold and P. Rinearson) and Business @ the Speed of Thought (1999).

Bibliography: See J. Wallace, Hard Drive (1992).

Gates, Bill ( William Henry) (1955– ) US businessman. In 1975 he co-founded Microsoft Corporation, which in the 1980s became the leading computer software producer. Gates is noted for his innovative thinking and aggressive business tactics. In 2000, he fought to prevent the break-up of Microsoft after the corporation was found guilty of breaking US anti-monopoly laws for the software it produced for the Internet.