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Billgatesland
What 787 million shares of Microsoft really means
By ERIC ELLIS
December 21, 1999
Web posted at 7 a.m. Hong Kong time, 6 p.m. EDT
How rich is Bill Gates? Of course, we all know he is the world's richest person. But how rich is he really? How does his $92 billion (as of the last record tick of the NASDAQ) translate?
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Here's some Yuletide food for thought on how important Gates and Microsoft could really be in our lives. Every year the G-7 group of wealthy nations meets to iron out what essentially amounts to a road map for the world economy. The G-7, of course, is the United States, Japan, Germany, France, Britain, Italy and Canada ... and Russia for a G-8 if the rich Westerners are feeling charitable. (China wants in but so far, no cigar.)
For the past 20 years or more, these powerful nations are generally acknowledged as the world's biggest and most successful economies. When the G-7 burps the rest of the world (developing or otherwise) tends to say excuse me. Yet however rich and successful, the G-7 collective economy is not rising at a compound rate of nearly 60% a year.
Microsoft's share price is. Bill Gates controls 15.5% of Microsoft. He owns 787 million shares valued at the current price of $115.25 each. Microsoft's stock price has risen more than 32,000% since its 1986 IPO. Put another way, Gates' wealth is now not just about just being bigger than Ford or Disney or any other behemoth of Corporate America, or Corporate Anywhere for that matter. That's an old measure better suited to youthful upstarts like Yahoo.
No, in the global power game where borders don't matter, it's now about being bigger than WHOLE COUNTRIES--not inconsequential nations like Fiji or Mozambique but real economies. Billgatesland is now worth more than the GDPs of Portugal and Ireland and is on a par with Greece.
And if it weren't for the success of Nokia, he'd have beat Finland as well. Maybe there was something more nationalistic in Gates' recent deal to hook Microsoft up with Sweden's Ericsson, Nokia's main competitor. That deal added 5% to Microsoft's share price, narrowing the gap between Finland and Billgatesland.
If Microsoft's shares perform at the level they have in recent years, Billgatesland will qualify for G-7 membership by the year 2005. It will then be worth more than $600 billion, which is about the size of the Canadian economy, the G-7's poorest member. If his wealth increases further still at the same rate, Gates will be worth more than the U.S. sometime between 2015 and 2020--and China gets all excited about beating the U.S. by 2040 at its current rate of growth.
You think the U.S. economy is booming? It's a pussy compared with borderless Billgatesland. Maybe there was something more to the U.S. Justice Department's declaration of war on Microsoft than the monopoly of Internet browsers. Gates' rise could be seen as not so much an attack on free trade and competition but as an assault on American economic sovereignty. He earns as much as money outside the U.S. as he does at home, a claim the American government can't make, despite the international primacy of its currency.
But, you say, consulting the five permanent members of the U.N. Security Council, power still ultimately revolves around who's got the Bomb. Gates doesn't have the Bomb but he's got something arguably much more powerful: 90% of the world's desktops. Indeed, in the battlefield that matters these days--the floor of the NASDAQ exchange--Gates and Microsoft have casually fielded Justice's big guns and soldiered on as if they were water pistols. Since Judge Jackson handed down his anti-Microsoft antitrust verdict six weeks ago, Bill Gates' worth has increased by 25%.
My tip for the 2010 G-7 venue? Redmond, Washington, and with better security than at the recent World Trade Organization meeting held in that poorer city nearby.
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