Microsoft co-founder and Chairman Bill Gates talked with Seattle Times reporters Benjamin J. Romano and Kristi Heim days before he would mark his transition from full-time work at his company to spend the majority of his time on philanthropy.

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Microsoft co-founder and Chairman Bill Gates talked with Seattle Times reporters Benjamin J. Romano and Kristi Heim days before he would mark his transition from full-time work at his company to spend the majority of his time on philanthropy. Here are edited excerpts from the conversation pertaining to Microsoft.

Q: Throughout your Microsoft career, you’ve written several course-setting memos to get the company motivated for new competitive threats and opportunities. Is that something you’ll continue to do in your role as senior technical adviser and chairman?

Bill Gates: Yeah, I might do that. In fact, there’s one that I’m thinking about writing now. I’m not saying it’s seminal, like Internet Tidal Wave, or the security memo. You know, [Chief Software Architect] Ray [Ozzie] did one a couple of years ago now that was about the services push. And so most things like that, that are very broad, if they’re really changing what people are going to do … those would come from Ray. I may suggest some to him. I can still write memos that talk about the market, and things going on. But memos that really are, ‘Hey, we should change our strategy, focus on this,’ those won’t come directly from me anymore.

Q: How would you describe the importance you assigned to those memos over the course of your career, and how were they received in general?

Gates: They are milestones in that they get people to go, “Wow, OK, this is more important than we thought. We get permission to really put our resources into this area.”

But we’re all reviewing things all the time. You know, I send 30 pieces of e-mail a day about this product, why doesn’t it work this way, and are you thinking about working with this guy. So I wouldn’t say that they’re the dominant thing.

Q: In the 1995 Internet Tidal Wave memo you wrote that the Internet could be as important to the company as the IBM PC or the graphical user interface. Now looking back on that, what has been the company’s biggest success in terms of the Internet in the last 13 years?

Gates: Well, certainly the Internet became an incredible benefit for the PC starting — you can pick — 1995, 1996, 1997, somewhere in that time frame. The thing that we and others have been predicting about all these machines being connected together, it started to happen. And it’s one of those things that’s self-reinforcing. The more Web sites you have, the more Web sites make sense.

That memo was important in terms of focusing our development on, for example, .NET, which is a programming framework that had some advantages for Internet-type development. It got us focused on the Windows Server, the features that need to go onto that. Windows Server volumes are up very, very dramatically from that time 10 years ago. There are features in Office that relate to connecting up to Internet information and visualizing it.

You can’t think of any Microsoft product that it hasn’t had an influence, because in the same way we went from 8-bit computing, to 16-bit computing, to graphics user interface, to assuming that you had at least occasional connectivity, those things underlie the designs you do. You can’t do Xbox Live without the Internet. It doesn’t even come to mind. And yet that’s the centerpiece, the key thing that’s really revolutionized gaming and made Xbox the leading high-end platform.

Q: One thing that wasn’t foreseen in that memo was the role that search, and now ad-funded search, would play. Here we are 13 years down the road, and search has become the application on the Internet, and Microsoft is in a relatively unfamiliar, underdog position in that market. What kept you from seeing that at that time?

Gates: I disagree with that. There’s not advertising in there, but there certainly is search. The whole “information at your fingertips” thing is a superset of search, in the sense that you don’t want to just get a bunch of links back. That’s not an end to itself. You want to organize a trip, you want to pick a product, you want to compare two different reviews. And information at your fingertips, that actually predates the Internet Tidal Wave memo, ’cause the information at your fingertips was saying, when they get connected, these [are the] scenarios you’ll be able to do. And that was starting to happen inside corporations before the Internet protocols even caught on. …

The importance that advertising would play was not in [the memo]. And even from the people who benefit the most from it, it wasn’t part of the original plans.

Q: If you could go back and change a business or technology decision you made, with the knowledge you have now, what might it be, and why?

Gates: I don’t think I’d go back and change anything, and I’d be afraid that things wouldn’t come out the same way. Microsoft is very successful, and at any point in time you could have said to me, “Oh, you didn’t buy this e-mail company,” and I’d say, “Yeah, jeez, I wish we had.” But then later we innovated enough that it didn’t matter. There was a time where we considered buying Novell, and we chose not to, and for a while that looked like it was a mistake not to have done that.

Most of the things we’ve done — betting on empowerment, betting on the magic of software, the basic thrust of who we are and what we do, hiring smart people, funding long-term research — all those things have worked out spectacularly well. And even the ones that haven’t worked out, I’m the kind of person that says, “Well, they will.” The Tablet [PC] is only being used by millions, not tens of millions. Well, I claim that’s a matter of time. Speech interface, visual interface are still very niche-oriented activities, but during the next decade we’re investing heavily in those, because we believe they’ll become mainstream. So we tend to stick to things longer than other people do.

Q: How are you going to divide your typical workweek between full-time now at the foundation and part-time at Microsoft?

Gates: The main thing I’ll be doing is the foundation work, and even working out how much of that is review meetings, trips, working with partners, going and doing deep dives on particular diseases, or cellphones, or better seeds, whatever it is. We’re working that out. When you take all of those things that will be pretty much a full-time schedule.

Then I’ll be over here at Microsoft several days a week, anywhere from two to six days a month, probably, and we haven’t figured that out, plus whatever I do on the board as a board member and just helping out with some specific projects. But that’s really up to Ray and [CEO] Steve [Ballmer] as they pick the things that are important to focus on.

Q: Do you know what some of the projects will be at this point?

Gates: We’ve talked about some. The only one that’s known for sure is that I’ll be helping with the search group, because I’ve been spending a lot of time with them, and that will keep going.

Q: Is that going to be in like a project-management role?

Gates: No, just somebody who makes suggestions. I will have no direct responsibilities; nobody will work for me. We’ll just sit and brainstorm about what they might do.

Q: And I imagine you’re going to keep an office in the new building the foundation has got under way down by Seattle Center?

Gates: Yeah, I already have an office. So the new building will have an office just like I do at the foundation today. I’ll be in that office a lot more than I am right now.

Q: Are you ready for the 520 commute?

Gates: It’s not that bad. I take the kids to school twice a week already, and that happens to be in the University District. So I understand both 520 going over, and 520 coming back. It’s worse coming back, actually, and I won’t have to do that, because I’ll just go over to the foundation. I can go drop the kids off [in the morning] and go to the foundation. I don’t have to come back across like I do now, because I’m coming back to Microsoft.

Q: And you do the driving?

Gates: About two days a week I do, yeah.

Q: What do you imagine you’ll regret most as you’re dialing down the amount of time you can spend at Microsoft?

Gates: I’m sure there are so many neat projects here, in the same way that the [foundation’s] malaria project is neat, and better agriculture is neat. But [Microsoft] projects, like unifying storage so that it looks the same across various devices or some of these natural interface things — I’ll miss working with the great people there, and really just sticking with those things to get them to critical mass in the market. That’s been a lot of fun. I’ve had one of the greatest jobs in the world, so I’m lucky that I have another job that I find equally interesting.

Q: How do you imagine your public profile is going to change as a result of this transition? You’ve been able to attract an audience for any kind of announcement Microsoft might want to make. Will Steve Ballmer still have that at his disposal when he needs it?

Gates: I don’t think he’ll use me much for product introductions. I mean, I’m available to him however he wants to use me, but I don’t think that’s likely to be what he’ll ask me to do.

Most of my public speaking will be foundation-related speaking. So you’ll hear more from me about education, and health, and those topics. I’ve been doing some of that, but it’s been flipped the other way, where 80 percent of my speaking has been Microsoft, and 20 percent has been foundation. So that will more than flip around the other way.

Q: Does it frustrate you after everything that the company has done to comply with its legal obligations to continue to have to face antitrust challenges now in a second decade?

Gates: No. I mean, Microsoft is a successful company, and just because somebody does an investigation doesn’t mean that there’s anything wrong. Name a country, and there’s been an investigation. …

There’s work that people in the legal department do in relating to those groups, and making sure we’re doing everything really well. Fortunately, the company as a whole gets to focus on software innovation, and that’s the main thing going on.

Q: Do you enjoy differently the trips you take for the foundation? They’re very different from the kinds of travel you did at Microsoft.

Gates: Yes. Microsoft never sent me to the slums, I don’t know why. But I was so naive about slums.

Q: In terms of what you actually do on a day-in/day-out basis, your normal itinerary — understanding that you’re seeing some of the greatest suffering in the world — how is it different to travel like that?

Gates: Well, the partners you meet with are different. In the case of Microsoft, you meet with the software-development companies that you’re helping out, and so that’s key. You meet with the people who are actually putting together computer solutions, and hear their particular needs. You go see the universities and talk about how you can collaborate on research.

The foundation has things that are equivalent to that. In every country we sit down with the NGOs that are there, and hear how they see things. And in every country there’s the U.N. organizations, and CARE, and the WorldVision, Save The Children, and their local country people are amazing at being able to talk to you about things that are going well, things that are not going well.

Then you go do hands-on things that sometimes are uplifting, where you’re seeing a trial that’s working. And they’re often grim because you’re reminded of the base level that you’re trying to have an effect on. So it’s just different people you meet with. But intellectually, you have to learn a lot, and get to be very impressed by most of the people you’re getting to talk to, and compare what you’ve seen in other countries.

There’s a lot of similarities as well. And I like to have a full schedule when I’m out of the country, just so I get as much done as possible. A few times I’ve done both Microsoft and foundation work, and that can be a super-full schedule. And now almost all my trips will be overwhelmingly foundation, although a few, when I’m in Nigeria next, I am doing a speech for Microsoft.

Q: You described yourself as a developer as recently as June 2 at TechEd. And I wonder how else you would describe yourself now as you’re making this transition?

Gates: I got to manage developers, and then strategize about their research agenda. I don’t think there’s any title that I deserve. I helped run a software company, and now I’m helping to run a foundation with the three different groups.

I don’t think there’s some title that goes with that. It does give me a chance to learn a lot of different things, because the intersection of policy, incentive systems, and science, and global cooperation, there’s a lot of things that come into when the foundation can have a big impact and when it can’t.

Q: Do you ever worry that Microsoft is not ready to go on without you on a daily basis?

Gates: Well, when I worked here full time, I worried that Microsoft was not ready to go on with me. My own mentality is, what do we need to do better, every day, what do we need to do better.

That’s the culture of Microsoft. OK, let’s make the Tablet better; let’s make search better. You know, we get a lot of user feedback; [we’ve] got a lot of research opportunities. So we never come into work and say, “Hey, we’re golden. You know, hey, let’s just lie around today. I mean, hey, you know, let’s just celebrate.” That’s not our culture.

And so it’s a hungry company, and it’s always thinking, “Hey, we need to do this. We need to do that.”

Certainly Steve as the CEO helps reinforce that, and he’s very, very good at that. But so do Ray, and Craig [Mundie, chief research and strategy officer], and that’s kind of the instinct that maybe I was part of helping to develop.

And there’s no guaranteed future for any company, but Microsoft is more strongly positioned, in terms of its research, the position of its products, and the quality of the people. We’re better positioned today than ever, and the opportunities of what software can do in the next decade are probably as strong as ever. We’ve got strong competitors, we always have had. Are these stronger than the others? That’s a hard comparison to make. They’re the ones who are still out there. So that’s what makes it a dynamic, interesting business.