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Gates looks back on 30 years at Microsoft

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Ina Fried CNET News

Published: 25 Jun 2008 16:04 BST

…I can show you the articles. They never do follow-up articles; I don't understand why. When they predict my death, they never reincarnate me.

But it's an appropriate dialogue, yes. There is a question whenever something new happens in the industry: will the leader be agile enough to take what they're good at and this new thing, and bring them together or not? That's always fair game.

People always tend to underestimate the assets that the leader has. I mean, how many times was it predicted that IBM would do well in various things? Well, heck, they did well in a lot of things for a long time.

So, our core skill set is software. Software on phones is a lot the same; software in TV sets is a lot the same; software in video games is a lot the same. We've always done software for a huge variety of devices.

Google is a very strong competitor, and so people will enjoy watching whether they can be challenged. The world will be better off if they are challenged effectively, and I think there's only one company left in terms of the depth and breadth and staying power that you need [to] really give them a big challenge.

Which is the bigger challenge? Is it Google the company because of their approach and their ambition and their assets and their talent, or is it the changes in the economics that's come with search and advertising and changes in software?
The economics haven't changed. I mean, the economics of software are very simple. Most of the profitability is made up out of making businesses more efficient. We saw operating systems and we saw productivity software, and those are not advertising-driven things. The online is changing some of how you deliver email and collaboration and those things, but we've been doing that off of servers; we have great cloud stuff that Ray [Ozzie] is driving. So, it's not really the economics.

The consumer side has always been that you weren't going to make a tonne of money there, but you could get great exposure.

Google is a very strong competitor, and so people will enjoy watching whether they can be challenged. The world will be better off if they are challenged effectively

Bill Gates

So, the business dynamic is very much the same [as is] the amount we can save, if you think of our economic impact, by making a worker have that intelligent whiteboard and intelligent desk and be able to look at business sales trends and look at what product you should buy, how do you work with your colleague in another country — improving those things. That's the huge impact of software in these next 10 years, not whether ads gleam on the left-hand side of your computer.

The breakthroughs have to do with natural user interface; data mining. Taking Office to the next level; that's way more impactful than anything about search-based advertising. I mean, Microsoft, fortunately, can be involved in both of those.

Were you relieved or disappointed that the Yahoo deal didn't go through?
Well, I've gotten a chance to help Steve [Ballmer] as he's worked this thing through. He feels very good about [making that] offer… if they had embraced that thing, he and I would have been very happy with that. They didn't, and we're very happy with our standalone strategy.

So, I think it's kind of strange for people to say: "Oh, what a blow to us." Well, hey, we created an option that was out of our control — whether or not they had the right timeliness, enthusiasm, reasonableness. That was completely in their control; that's fair. Well, it's between them and their shareholders whether that's fair, but we knew they had a choice to make, and they — during the relevant time frame — in none of those three did they meet what would have made it make sense for us.

We have a good standalone strategy. It takes longer to get scale in terms of scale of advertising, end-user share, but it's all predicated on brilliant innovation. You can't have a standalone strategy or a strategy that involves any acquisition unless you're going to have a search that, in important respects, people view as a better search. So, it starts with something that the world at large doesn't have to believe yet but we believe in, which is that we can have something that's really fantastic and competes for consumers in. If you have that, even without the acquisition, that's a great thing. It's just how do you go and get the scale? It will take you longer.