Gates: Microsoft, the Suit and His Foundation

As Bill Gates wrapped up his tenure as a full-timer at Microsoft, as part of his plan to focus his energies on the Bill & Melinda Gates Foundation, he sat down with NEWSWEEK's Steven Levy to talk about his legacy, the good days and difficult ones at Micrcosoft, and his future at the foundation. Excerpts.

NEWSWEEK: Are you leaving Microsoft at a time of extraordinary challenge?
Bill Gates: Every year that we've existed, we've had the excitement that this is a fast-changing business. I would say we're probably stronger relative to that than we've ever been because of not only our product strength and our great people, like Steve [Ballmer] and Ray [Ozzie], but the strength of Microsoft Research. We are quite unique in the relationships we have with the universities and the quality of our researchers.

But doesn't part of you want to stick around for the battle against Google?
If you say, "Gosh, I won't leave when there's an interesting competitor," then you'd have to die on the job. I have the unique situation of the opportunity to really engage with the foundation as it's scaling up, which is something I also love. So, yes, I'm giving something up. This is a fun job, and with the neat things going on, there's nothing in my making this change that's saying that software has become less interesting.

Do you feel that Vista didn't come out the way you hoped it would?
In every product we ship, the team knows of features that I asked them to put in that they didn't get in. So you never ship a perfect software product. Thank goodness you don't, because then what would you do? There are brilliant things that were done in Windows Vista, and there are some things where we say, "Hey, are we putting out too many prompts, were the device drivers really ready?" Are there some areas of performance where Windows 7 has just got to be dramatically better in? You bet. We are good at giving ourselves a hard time. And sometimes the outside world even helps us do that.

Did you participate in the discussions of Microsoft's attempt to buy Yahoo in the same way you would have, had you not had this transition coming?
Yes, absolutely. Steve is the CEO, but he involves me very heavily. Something huge like that, I would always be involved in, maybe not as much on a day-to-day basis as I have been on this one.

Does the fact that Microsoft offered almost $50 billion for Yahoo show that the company hasn't made the most of the Internet opportunity you identified in 1995, the year Yahoo was founded?
Let's see, how have things gone since 1995? Have our sales increased? Have our profits increased? What was our main goal for the Internet in 1995? It was to make sure that Microsoft software was used to do Web sites, which became the most important type of application possible. Today the majority of all Web sites are written using Visual Studio, running on Windows Server. We made the Windows platform the most popular for writing Internet applications. We made our browser the most popular. We created a little company called Expedia, and learned from that and spun it off for over a billion dollars. So we've done great things since 1995. Did we do everything? Do we wish that we'd also done everything that, say, Google has done? Sure. But I'll take our track record since 1995 versus anyone.

Microsoft over the years has had a reputation for being a really, really tough competitor. Has Microsoft been accurately portrayed?
It depends on what you mean. Taking word processing, were we a tough competitor? Yes, we did a great product, and it kept winning review after review after review and actually at some point it gained some market share. And today many of those other word processors are a footnote in history, in Microsoft Word. So is that tough? It has nothing to do with somebody who has been meaner, or negotiations: we put a better team of people together writing word processors.

Is there a low point you can delineate?
Not really.

Not the antitrust episode?
No, because there's always so many things going on. There's no point at which the antitrust thing was the dominant thing. There certainly was a point where we had this honeymoon period that really successful technology companies get, where they think you know everything. The banks want you to tell them about the future of banking, airline companies want you to tell them about that, the business stories about the way they serve lunch at Microsoft. It's silly that somehow we have some magic thing. But it happens to be somebody else right now. It's kind of crazy in a way--are these random choices so sacrosanct and important? You get into this period in the late '90s when people thought startups could do everything. They didn't care about research and the long-term effort required to do speech recognition, visual recognition. It got a little frustrating-- all this capital was being thrown at those people, and they weren't really doing multiproduct, long-term things, they were just kind of doing this one thing, but that was messing up the way that our work was looked at. You're competing for talent with those people, and you have these capricious stories about some guy who made millions who happened to cash out, and his roommate is working on some great thing at Microsoft Research, which has way more impact. Of course, our employees made a lot of money, too, but over a longer period of time.

Yes, but the antitrust thing seemed to affect you personally.
I didn't like that. If I had one thing to change, maybe I'd take my little paintbrush and paint that one thing out of the picture. But we were doing our best work at that time. If you look at our sales and profits, you look at our impact on blind people, you look at our impact on students, you look at our empowerment of the world's digital economy, those are the most amazing years.

You look now on those years favorably?
There's no year that I didn't, net, love my job. We made crazy acquisitions in that period, because everybody was kind of going nuts. Even with the lawsuit, you could say there are some lessons learned out of it.

What will you do when you're at the [Gates Foundation] full time?
I'll have about four times as much time to do strategy reviews--what we're doing in education, the various diseases, agriculture, microfinance, Also, my external voice will shift to be mostly about the foundation. So my travel will be more to Africa and India. I'll be meeting with companies, drug companies about the medicines and the things they can do, as part of this creative capitalism thing. I'll be meeting with other philanthropists. I'm going to learn a lot more of the science, I'll learn a lot more about health things. The education area is one where I haven't done nearly as many visits as I'd like to, and there are some real great thinkers about how teachers can learn from each other, and use tools in different ways, how curriculum can be better. Melinda is actually quite a bit ahead of me on that.

In your new role, how will your public side be different?
Well, we don't have a CES [Consumer Electronics Show] on malaria. So you don't get 50,000 people converging on a city and saying, "Oh, the keynote is coming, Bill is coming to speak on malaria!" With a lot of things we do--new seeds, or new vaccines, things like that--you don't get quite the large gathering of humanity. Now, some of the discussions like my [2007] Harvard commencement speech, that was fantastic. My Davos speech was quite well-attended and covered quite well. So I'll have big venues, but I won't have a rabid user group.

On the positive side there may be fewer attacks on you by Microsoft haters.
The new world is more controversial than the old world. We do family planning. We fund research on crops that will help the poor, not starve them. Some people think that type of droughtproof genetically modified seed causes environmental changes and you shouldn't take science and help the poor people. In terms of controversy, this whole thing about which operating system somebody uses is a pretty silly, limited thing, compared to starvation and death.

How much is this move motivated by responsibility--the message about giving back that your mother left with you--as opposed to doing what is really fun for you?
With the foundation stuff, doing health breakthroughs for the poor has a very broad, beneficial impact, and so those are values that my parents deserve a lot of credit for establishing in me. But the day-to-day part of it is fun, going to India and seeing, "Are they planning these cities, do people get water, where is the health-care thing not working, do vaccines have to be cold, how do you get enough refrigerators, is that expensive, who pays for that, who measures that, when does it work, when does it not work?" I love the fact that I get to meet with scientists who are devoting their lives to these things. So in no sense would I say, "Oh, I'm making a sacrifice to do something my mother told me I ought to do." I am doing something my mother told me I ought to do, but I'm doing it because it's going to be a lot of fun.

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