Microsoft chairman and CEO Bill Gates capped off his whirlwind two-day East Coast tour, during which he was grilled by a Senate Judiciary Committee panel, with one final effort in his ongoing campaign to assure the world at large that his company's success is not assured.
Gates appeared relaxed and humorous today during the final event of his tour, a public interview with television talk show host Charlie Rose and a subsequent press conference in the New York Public Library. The event, nominally held to mark Gates' US$640,00 gift to the library, provided a stage for Gates to do a public post mortem on yesterday's hearing.
Gates said he was pleased with the way the hearing went, but said that in the face of controversy Microsoft is changing controversial ISP and Internet content provider contracts.
Rose noted that both he and Gates attended “Time” magazine's 75th anniversary party last night, where Gates sat at a table with movie star Sharon Stone and J.D. Watson, co-discoverer of the double-helix structure of human DNA.
Gates, who was one of the speakers at the dinner, said he chose to talk about the Wright brothers, credited with building the first working airplane, because of their “persistence” in creating what could be considered “the first superhighway.”
The subject fits with how Gates, in the face of growing concern about his ability to stifle competition in the computer industry, has been promoting Microsoft – a company that through hard work, perseverance and scientific know-how has built a popular, but not monopolistic, product.
Gates was prompted by Rose to explain why he just doesn't concede that Microsoft has a monopoly – albeit legal -- on operating systems, and that the monopoly status could change any day because of tough competition.
“When you say it could change in a day, that contradicts the definition of what a monopoly is; a monopoly doesn't just mean a popular product,” Gates retorted.
Gates said he had an early interest in politics, and that as an adolescent he was a Congressional page. At that time George McGovern was the Democratic presidential candidate for the 1972 election with Thomas Eagleton as his initial running mate. Eagleton had to quit the campaign after it was discovered that he had been treated for mental health problems, and Gates noted: “I actually made a lot of money because I cornered the market for McGovern-Eagleton campaign buttons.”
Raising an eyebrow, Rose interrupted, “You cornered the market, did you?’
As the audience erupted in laughter, Gates gamely replied, “Well, I got that out of my system early.”
Gates said that initially Sun Microsystems Inc. and Netscape Communications Corp. were the only companies to be invited to yesterday's hearing, but joked: “The senator [Orrin Hatch, the Republican Judicial Committee chief from Utah] wanted to make sure that nobody was confused that I didn't have competitors.”
Gates added that IBM is his biggest competitor and is 10 times Microsoft's size. “But let's say they [Netscape and Sun] are two of the feistiest competitors ... [Sun CEO and Chairman Scott] McNealy said Windows would be around forever, but what he really meant was that two dusty old copies would be around.”
Gates refuted the idea that Microsoft could buy up competitors or companies that have new ideas.
“There is no shortage of capital .. anyone who wants to get their idea funded can do that.”
In terms of attempting to make money on the Internet, Gates stressed that Microsoft is in the same boat as everyone else. After threatening for months that it would charge subscribers, Microsoft's Slate on-line magazine is finally going to take the plunge soon, but there is no guarantee it will make money, Gates noted.
“Everyone else who has gone into that business has had a very tough time,” he said.
Gates said there are four main areas Microsoft does business in: Windows, server software, the Office suite “and all the other things we do” including the Internet related businesses.
“If you look at those four, 90 percent of our revenues are in the first three ...
we understand the business model for those things very well; in that last category I don't think anyone can say they think they have a great business model.”
At the end of the day, Gates said, there is only one issue of any significance, and that is whether Microsoft is allowed to innovate by adding functions to Windows.
“There's really no middle ground: either I can put speech recognition in or I can't; either I can put new artificial intelligence in or I can't; either I can support the ongoing Internet standards or I can’t.”
Microsoft wants to add speech recognition to Windows in two or three years, but even if it is allowed to it can't be assured of success, Gates said.
“We're not sure if people want to talk out loud to their computers ... in their cubicles at work.”
Gates appeared at ease even when talking about what could have been the touchy issue of his billions of dollars in personal wealth.
When Rose asked about whether he's figured out how to give away money philanthropically, Gates said: “I've figured out parts of it -- you know, a hundred million here, a hundred million there ... “