Bill Gates
1955 -

He controls something the world's PCs can't live without. But he's neither as good nor bad as the hype
By DAVID GELERNTER for Time Magazine
 

If we are talking creativity and ideas, Bill Gates is an American unoriginal. He is Microsoft's chief and co-founder, he is the world's richest man, and his career delivers this message: It can be wiser to follow than to lead. Let the innovators hit the beaches and take the losses; if you hold back and follow, you can clean up in peace and quiet.

Gates is the Bing Crosby of American technology, borrowing a tune here and a tune there and turning them all into great boffo hits — by dint of heroic feats of repackaging and sheer Herculean blandness. Granted he is (to put it delicately) an unusually hard-driving and successful businessman, but the Bill Gates of our imagination is absurdly overblown.

Yet we have also been unfair to him. Few living Americans have been so resented, envied and vilified, but in certain ways his career is distinguished by decency — and he hasn't got much credit for it. Technology confuses us, throws us off the scent. Where Gates is concerned, we have barked up a lot of wrong trees.

A 1968 photo shows Bill as a rapt young teenager, watching his friend Paul Allen type at a computer terminal. Allen became a co-founder of Microsoft. The child Gates has neat hair and an eager, pleasant smile; every last detail says "pat me on the head." He entered Harvard but dropped out to found Microsoft in 1975.

Microsoft's first product was a version of the programming language BASIC for the Altair 8800, arguably the world's first personal computer. BASIC, invented by John Kemeny and Thomas Kurtz in 1964, was someone else's idea. So was the Altair. Gates merely plugged one into the other, cream-cheesed the waiting bagel and came up with a giant hit.

By 1980, IBM had decided to build personal computers and needed a PC operating system. (Computers are born naked; they need operating systems to be presentable.) Mammoth, blue-chip IBM employed thousands of capable software builders, and didn't trust a single one of them; IBM hired Microsoft to build its operating system. Microsoft bought Q-DOS from a company called Seattle Computer Products and retailored it for the PC.

The PC was released in August 1981 and was followed into the market by huge flocks of honking, beeping clones. Microsoft's DOS was one of three official PC operating systems but quickly beat out the other two. DOS was clunky and primitive at a time when the well-dressed computer was wearing UNIX from Bell Labs or (if its tastes ran upscale) some variant of the revolutionary window-menu-mouse system that Xerox had pioneered in the 1970s. But despite (or maybe because of) its stodginess, DOS established itself as the school uniform of computing. It was homely, but everyone needed it. Once again, Gates had brokered a marriage between other people's ideas and come up with a hit. DOS was even bigger than Basic. Gates had it made.

Apple released the Macintosh in January 1984: a tony, sophisticated computer was now available to the masses. Henceforth DOS was not merely homely, it was obsolete. But it continued to rake in money, so what if the critics hated it? In May 1990, Microsoft finally perfected its own version of Apple windows and called it Microsoft Windows 3.0 — another huge hit. Now Gates really (I mean really) had it made.

By the early '90s, electronic mail and the Internet were big. Technologists forecast an Internet-centered view of computing called "mirror worlds." Technophiles enthused about the "information superhighway." The World Wide Web emerged in 1994, making browsers necessary, and Netscape was founded that same year. Sun Microsystems developed Java, the Internet programming language. Gates hung back. It wasn't until 1996 that Microsoft finally, according to Gates himself, "embraced the Internet wholeheartedly."

Why lead when you can follow? Microsoft's first browser, Internet Explorer 1.0, was licensed from a company called Spyglass. It was an afterthought, available off the shelf as part of a $45 CD-ROM crammed with random tidbits, software antipasto, odds and ends you could live without — one of which was Explorer. Today Microsoft is the world's most powerful supplier of Web browsers, and Gates really has it made. The U.S. Justice Department is suing Microsoft for throwing its weight around illegally, hitting companies like Netscape below the belt. The trial is under way. Whoever wins, Gates will still be the No. 1 man in the industry.

The world pondered Gates and assumed he must be a great thinker. During World War II, Cargo Cults flourished on New Guinea and Melanesia: people who had never seen an airplane pondered incoming U.S. aircraft and assumed they must be divine. Technology is confusing, and these were reasonable guesses under the circumstances. In 1995 Gates published a book (co-authored with Nathan Myhrvold and Peter Rinearson) called "The Road Ahead." Peering far into the future, he glimpsed a technology-rich dreamworld where you will be able to "watch Gone With the Wind," he wrote, "with your own face and voice replacing Vivien Leigh's or Clark Gable's." Apparently this is just what the public had been dying to do, for "The Road Ahead" became a runaway best seller, though it is lustrous with earnest goofiness, like a greased-down haircut.

And yet we tend to overlook (in sizing him up) Gates' basic decency. He has repeatedly been offered a starring role in the circus freak show of American Celebrity, Julius Caesar being offered the Emperor's crown by clamorous sycophants. He has turned it down. He does not make a habit of going on TV to pontificate, free-associate or share his feelings. His wife and young child are largely invisible to the public, which represents a deliberate decision on the part of Mr. and Mrs.

If postwar America of the 1950s and '60s democratized middle-classness, Gates has democratized filthy-richness — or has at least started to. Get the right job offer from Microsoft, work hard, get rich; no miracle required. Key Microsoft employees pushed Gates in this direction, but he was willing to go, and the industry followed. The Gates Road to Wealth is still a one-laner, and traffic is limited. But the idea that a successful corporation should enrich not merely its executives and big stockholders but also a fair number of ordinary line employees is (although not unique to Microsoft) potentially revolutionary. Wealth is good. Gates has created lots and has been willing to share.

Today Gates, grown very powerful and great, sits at the center of world technology like an immense frog eyeing insect life on the pond surface, now and then consuming a tasty company with one quick dart of the tongue.

But the Microsoft Windows world view is dead in the water, and Microsoft has nothing to offer in its place. Windows is a relic of the ancient days when e-mail didn't matter, when the Internet and the Web didn't matter, when most computer users had only a relative handful of files to manage. Big changes are in the works that will demote computers and their operating systems to the status of TV sets. You can walk up to any TV and tune in CBS; you will be able to walk up to any computer and tune in your own files, your electronic life. The questions of the moment are, What will the screen look like? How will the controls work? What exactly will they do? and Who will clean up?

Microsoft? Maybe. On the other hand, being the biggest, toughest frog in the pond doesn't help if you're in the wrong pond. Some people have the idea that Microsoft is fated to dominate technology forever. They had this same idea about IBM, once admired and feared nearly as much as Microsoft is today. They had essentially the same idea about Japan's technology sector back in the 1980s and early '90s. It isn't quite fair to compare Microsoft to a large country yet. But Japan was on a roll and looked invincible — once. (Or, if you go back to Pearl Harbor, twice.)

As for Gates himself, he is no visionary; he is a technology groupie with a genius for showing up, for being at the right place at the right time. His secret is revealed in that old photo with Paul Allen. He is a man who likes computers very much. Not their intellectual underpinnings, not the physics or electronics, not the art or philosophy or mathematics of software — just plain computers. He's crazy about them. It seems like an odd passion, but after all, some people are crazy about Pop-Tarts. And Gates will be remembered alongside Pop-Tarts, in the long run, as vintage Americana, a sign of the times. A little on the bland side perhaps, unexciting, not awfully deep, not to everyone's taste, but not all that bad.
 

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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.

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William Henry Gates III, KBE, commonly known as Bill Gates, is an American businessman and a microcomputer pioneer. Along with others, he wrote the original Altair BASIC interpreter for the Altair 8800 (an early microcomputer). With Paul Allen, he co-founded Microsoft Corporation, and is now its chairman and "Chief Software Architect." According to Forbes magazine, Gates is the wealthiest person in the world.

Bill Gates was born in Seattle, Washington, on October 28, 1955, to William H. Gates, Sr., a corporate lawyer, and Mary Maxwell Gates, board member of Berkshire Hathaway, First Interstate Bank, Pacific Northwest Bell and the national board of United Way. He is William Henry Gates III, his great-grandfather being the true William Henry Gates Sr.

Gates attended Lakeside School, Seattle's most exclusive prep school, where he was able to develop his programming skills on the school's minicomputer. In need of more computing power, Gates and his computer buddy, Paul Allen, sneaked into the University of Washington computer labs. They were later caught but struck an agreement with lab administrators by providing free computer help to students. He later went on to study at Harvard University but dropped out without graduating to pursue what would become a lifelong career in software development. It was while he was at Harvard that he met the current CEO of Microsoft, Steve Ballmer. They were roommates during their freshman year.

While he was a student at Harvard, he co-wrote with Paul Allen the original Altair BASIC interpreter for the Altair 8800 (the first commercially successful personal computer) in the mid 1970s. It was inspired by BASIC, an easy-to-learn programming language developed at Dartmouth College for teaching purposes.

Gates married Melinda French on January 1, 1994. They have three children, Jennifer Katharine Gates (born April 26, 1996), Rory John Gates (born May 23, 1999) and Phoebe Adele Gates (born September 14, 2002).

In 1994, Gates acquired the Codex Leicester, a collection of writings by Leonardo da Vinci; as of 2003 it was on display at the Seattle Art Museum.

In 1997, Gates was the victim of a bizarre extortion plot by Chicago resident Adam Quinn Pletcher. Gates testified at the subsequent trial. Pletcher was convicted and sentenced in July 1998 to six years in prison.

According to Forbes, Gates donated money to the 2004 presidential campaign of George W. Bush. According to the Center for Responsive Politics, Gates is cited as having donated at least $33,335 to over 50 political campaigns during the 2004 election cycle.

On December 14, 2004, Bill Gates joined Berkshire Hathaway's board, formalizing the relationship between him and Warren Buffett. Berkshire Hathaway is a conglomerate that includes Geico (automobile insurance), Benjamin Moore (paint) and Fruit of the Loom (textiles). Gates also serves on the board of Icos, a Bothell biotech company.

On March 2, 2005, the Foreign Office of the United Kingdom announced that Gates would receive the title of Knight of the British Empire for his contribution to enterprise in the United Kingdom and his efforts in poverty reduction around the world. Because he is not a Commonwealth citizen, he cannot use the title of "Sir," but he may put the letters "KBE" after his name.

The Gates family lives in the exclusive suburb of Medina, Washington, in a huge earth-sheltered home in the side of a hill overlooking Lake Washington. The Gates home is a very modern 21st century house in the "Pacific lodge" style, with advanced electronic systems everywhere. In one respect though it is more like an 18th or 19th century mansion: it has a large private library with a domed reading room. While it does have a classic flavour, the home has many unique qualities. Visitors are surveyed and given a microchip upon entrance. This small chip sends signals throughout the house, and a given room's temperature and other conditions will change according to preset user preferences. According to King County public records, as of 2002, the total assessed value of the property (land and house) is $113 million, and the annual property tax is just over $1 million.

In 1975, Gates and Allen co-founded Micro-Soft, later Microsoft Corporation, to market their version of BASIC, called Microsoft BASIC. Microsoft BASIC became the foundation of a successful software licensing business, being bundled (usually in ROM) with most home and personal computers of the 1970s and 1980s.

In February 1976, Bill Gates wrote the Open Letter to Hobbyists, which annoyed the computer hobbyist community by asserting that a commercial market existed for computer software. Gates stated in the letter that software should not be copied without the publisher's permission, which he equated to piracy. While legally correct, Gates' proposal was unprecedented in a community that was influenced by its ham radio legacy and hacker ethic, in which innovations and knowledge were freely shared in the community. Nevertheless, Gates was right about the market prospects, and his efforts paid off: Microsoft Corporation became one of the world's most successful commercial enterprises and a key player in the creation of a retail software industry.

Microsoft's key moment came when IBM was planning to enter the personal computer market with its IBM Personal Computer (PC), which was released in 1981. IBM approached Microsoft for an operating system (they had already licensed its language products), but Microsoft did not have one to sell and referred IBM to Digital Research. At Digital Research, IBM representatives spoke to Gary Kildall's wife Dorothy, but she declined to sign their standard non-disclosure agreement, which she considered overly burdensome. IBM then returned to talk to Microsoft. Gates obtained rights to a cloned design of CP/M, QDOS, from Tim Paterson of Seattle Computer products for $50,000 and licensed it to IBM for "about $80,000", according to Gates, and MS-DOS/PC-DOS was born. Later, IBM discovered that Gates' operating system could have infringement problems with CP/M, contacted Kildall, and in exchange for a promise not to sue, made an agreement that CP/M would be sold along with PC-DOS when the IBM PC was released. The price set by IBM for CP/M was $250, and for MS-DOS/PC-DOS it was $40. MS-DOS/PC-DOS outsold CP/M many times over, becoming the standard. Microsoft's licensing deal with IBM was not particularly lucrative in itself (it did not include royalties), but critically, Microsoft retained the right to sell MS-DOS to other computer manufacturers. By marketing MS-DOS aggressively to manufacturers of IBM-PC clones, Microsoft gained unprecedented visibility in the microcomputer industry, even rivalling IBM.

In the mid-1980s Gates became excited about the possibilities of compact disc for storage and sponsored the publication of the book CD-ROM: The New Papyrus that promoted the idea of CD-ROM.

In the late 1980s, Microsoft and IBM partnered in the development of a more advanced operating system, OS/2. The operating system was marketed in connection with a new hardware design, the PS/2, that was proprietary to IBM. As the project progressed, Gates oversaw continuing friction with IBM over the system's design, hardware support, and user interface. Ultimately he came to believe that IBM wanted to marginalize Microsoft from having any input in OS/2's development. On May 16, 1991, Gates announced to Microsoft employees that the OS/2 partnership was over and Microsoft would henceforth focus its platform efforts on Windows and the NT kernel. In the ensuing years OS/2 fell to the side, and Windows became the favored PC platform.

During the transition from MS-DOS to Windows, Microsoft gained ground on application software competitors such as WordPerfect and Lotus 1-2-3.

Nearly a decade later, Microsoft's Internet Explorer web browser displaced Netscape's Navigator, which many attributed to Microsoft's inclusion of Internet Explorer in Windows at no extra charge. An opposing view is that the inclusion in Windows was less important in Internet Explorer's adoption than Microsoft's improvement of the browser's features to a level comparable with Navigator.

As the architect of Microsoft's product strategy, Gates has aggressively broadened the company's range of products and, once it has obtained a leading position in a category, has vigorously defended that position. His and other Microsoft executives' strategic decisions have more than once drawn the concern of competition regulators and in some cases have been ruled illegal.

In 2000, Gates promoted long-time friend and Microsoft executive Steve Ballmer to the role of Chief Executive Officer and took on the role of "Chief Software Architect".

With his wife, Gates founded the Bill & Melinda Gates Foundation, a charitable organization. The foundation's grants have provided funds for underrepresented minority college scholarships, AIDS prevention, diseases that strike mainly in the third world, and other causes. The Foundation currently provides 90% of the world budget for the attempted eradication of poliomyelitis (polio), the World Health Organization having 'moved on' to other diseases. In June 1999, Gates and his wife donated US$5 billion to their foundation. They have donated more than US$100 million to help children suffering from AIDS. On January 26, 2005, it was announced that the Foundation had made a further contribution of US$750 million to the international Vaccine Fund to help fight diseases such as diphtheria, whooping cough, measles, poliomyelitis and yellow fever. As of 2005, the foundation has an endowment of approximately US$28 billion.

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