INTERVIEW with Bill Gates: Hard Drive

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Bill Gates displayed his well-known combativeness last month when TIME questioned him about Microsoft's controversial business practices. These are excerpts from a two-hour interview with TIME technology editor Philip Elmer-DeWitt and San Francisco bureau chief David S. Jackson

TIME: Are you betting the company on Windows 95?

Gates: I don't know what "bet the company" means. We're a company with $4 billion in the bank. I don't think we'll disappear. We're not like Time Warner, with $15 billion in debt. But if you had to take one thing in the next year and say what will our biggest impact on the PC industry be, it would clearly be Windows 95. Windows 95 is a very, very big deal.

TIME: Have you won over all the easy computer customers? Is it going to be harder now to convert the nonusers?

Gates: Well, 20 years ago, when we started, we talked about a computer on every desk and in every home. Now, if you take that to its extreme and say 100% of the people, clearly we'll never get there. There'll always be some people who choose not to participate, just like some people don't use the phone or watch TV.

I see it as a continuum. That is, as more multimedia titles come out, as more information is online, as we make these things easier to use, we start to draw in more and more people. Now, once you get in for one application, the hurdle to learn a second one is fairly low. My dad wanted to do his taxes automatically. Then I got him doing word processing and now electronic mail because everybody in our family is connected.

TIME: Do you spend much time on the Internet?

Gates: Well, I spend a few hours a week just seeing the new stuff that's out there. If you count E-mail, I'm on the Internet all day, every day.

TIME: We'd like to ask you about some of the charges that have come out in court.

Gates: This is old, old stuff.

TIME: We'd like to have it on the record, if you wouldn't mind.

Gates: Are you, like, a historical publication or a newsmagazine?

TIME: Just last January, according to Apple, you threatened to stop developing for the Macintosh. Is this true?

Gates: We at no time, in any way, have ever threatened to stop developing for the Macintosh. I don't even understand what it would mean. It's the most bizarre thing in the world. What would we get out of that? It's a big revenue source. It's a profitable business.

TIME: Borland [another Microsoft competitor] charges that you used vaporware [the preannouncement of a nonexistent product] to screw up the development of Turbo BASIC. Which you did, right?

Gates: No! If you're accusing me of competition, then yes. You have to decide. Are we optimized to help competitors, or are we optimized to help customers? Should we be open about our plans?

Do you understand what is being said here? The question is, are you allowed to tell people what your products are in advance?

TIME: Isn't the point that if you're a small player and you pre-announce a product, it has no effect, but that when a large player preannounces, it can freeze out the competition?

Gates: I'd say that's pretty nonsensical. Let's say you take a market, like the cigarette market, and you ban advertising. Who benefits?