Bill Gates: The future according to the world's richest man
An exclusive interview with Bill Gates in which the Microsoft founder and world's richest man talks to Ian Burrell in New York - and identifies the gadget that he thinks will one day provide media consumers with their every need
Monday 20 March 2006
Alongside waxwork images of Michael Jackson, Jerry Springer, Whoopi Goldberg and other famous Americans, a life-size replica of Bill Gates, sat on a metal stool and wearing a red V-neck sweater and the semblance of a smile, is among the exhibits in New York's Madame Tussaud's, halfway along 42nd Street.
Just around the corner, the real-life version, as diminutive as the waxwork, climbs out of a hulking black Yukon XL SUV and steps on to the pavement before passing, quite inconspicuously, through the crowds of workers headed for their offices in the spitting early morning rain.
Bill Gates is, by a long measure, the richest man in the world. This month Forbes magazine valued his personal wealth at $50bn (£29bn). It was the 12th year running that he had topped the rich-list. His company Microsoft, which supplies the software for 90 per cent of the world's computers, is worth $280bn. He is also the chairman and founder of the the media services company Corbis, which claims to have the most comprehensive photographic collection on the planet.
Gates, along with his wife Melinda and the rock star Bono, was recently named as "Person of the Year" by Time magazine. This was largely because of the work of the Bill & Melinda Gates Foundation, which supports disease immunisation programmes, research into HIV/Aids, and education for the poor, through an endowment of $30bn. It makes the foundation the largest charity in the world. According to former US president Jimmy Carter, the foundation - which has influenced Tony Blair and other global leaders in providing more money for global healthcare - is "the most important organisation in the world".
Put Gates on a busy street and people don't notice him. Yet when his presence is registered, the aura of his power is palpable. This is a man heads of state anxiously approach for an audience.
Sitting with his back to a 30th-storey window that commands a stunning view across the Hudson River to New Jersey, the most powerful figure in global media last week set out his vision. It is as futuristic as one might expect from one of the greatest innovators of the 20th century but his words contain some comfort for those working in more traditional fields. For a start, he thinks that the humble newspaper will outlast him. "I'm sure it will be more than 50 years when somebody is still printing a newspaper and taking it to someone, somewhere," says Gates, who was 50 in October.
This qualified endorsement of the lasting viability of the press comes with the further caveat that Gates is taking a global view. "Newspaper readership is still growing in India," he observes, smiling. Ultimately, he feels, print media will have to adapt to survive. "We are seeing the shift where younger people appreciate the flexibility of the internet to let them select the subjects that they have particular interest in, and to navigate links and see what's hot," he says. "We are in the throes of a transition where every publication has to think of their digital strategy."
But rather than castigate traditional news-media organisations for their failure to act more quickly, Gates is positive about the changes that have already been made. "I don't think there's a... boundary between digital media and print media. Every magazine is doing an online version." He has clearly been impressed by the way the United Kingdom has kept pace with the United States in terms of embracing the digital age. "I would say the UK is a lot like the US. The businesses have done very well adopting the digital technologies," he says. "UK companies are in very international and very competitive markets. If you look at PC penetration in the UK it is very similar to the United States market. The broadband competition is heated up there in a way that's healthy to drive the penetration."
His view of the UK public sector is not so rosy. "The Government is more of a mix thing, where there are some great leadership examples but it's not across the board ahead of other countries. In education, every country is really just at the start," says the man who dropped out of Harvard University in his second year but has since ploughed millions of pounds into giving scholarships and providing computer and internet access to more than 10,000 libraries.
Gates is still eagerly awaiting the moment when the government of any country is able to "eliminate paper" from their criminal justice or medical records systems. "Because the government market isn't subject to the same competitive factors it was always to be expected that it would be a bit slower to move to the new technology and yet the opportunity for efficiency, visibility of information, eliminating forms, is still quite strong."
When Gates visited London last October, he gave an address to the inaugural conference of the Interactive Advertising Bureau and made the claim that "the future of advertising is the internet". The claim coincided with the IAB's prediction that online advertising was worth £1bn a year in the UK and had outstripped the markets for both radio and billboards.
Gates thinks that the increasing availability of high-quality visual imagery will further the growth of online advertising and that the internet will increasingly provide the best platform for some of the most ambitious and targeted creative ad work. "You want to grab somebody's attention and great visuals are the way that's done," he says. "[Online] is an environment where getting attention is probably tougher than ever, and yet it's also an environment where you can try out certain creative [initiatives] and see what type of response you get to them far more effectively. If you can get the cost of creation down, then the idea of having more variety works."
This process will be hastened, he believes, as more and more television content moves online. "Internet TV and the move to the digital approach is quite revolutionary," he says. "TV has historically has been a broadcast medium with everybody picking from a very finite number of channels. If you want content that is a local sports thing or a hobby that you are interested in, that's not available to you. The use of the internet to deliver those video signals and the idea of seeing what you are interested in, and having the ads targeted to you, is becoming the standard way that video is delivered. Over the course of this next decade that will be very common."
Internet advertising, aimed at niche audiences and more creatively ambitious, will provide a way round the increasing problem for advertisers of television viewers fast-forwarding through commercial breaks in shows that they have recorded. "It will be possible to target the ads and it will be important to have ads that the consumer doesn't skip over, incorporated in the right way."
Gates lives outside Seattle on the banks of Lake Washington in a vast mansion that has its own private beach, cinema, library, boathouse and an estuary stocked with salmon and trout. It is a short drive from the sprawling 295-acre Microsoft campus at Redmond, where Gates's office is in Building 8 and new gadgetry is tested in a futuristic house called Building 33.
He has flown to New York in his capacity as chairman of Corbis, the company he founded in 1989 when he realised that ownership of visual content would be crucial to the development of the digital media environment that he has done so much to create. The company, which is expanding rapidly and has offices in 14 countries, licenses its collection of some 80 million still and moving images to advertisers, corporate marketers, broadcasters and publishers. Although Corbis has yet to turn a profit, Gates is convinced of the soundness of his thinking and believes that 2006 will be "a milestone year" for the venture.
Corbis is rubbing its hands at the global growth in mobile-phone technology, believing that with more than 800 million new handsets expected to be powered up worldwide this year there will be great money-making opportunities in providing screen-saving pictures and other visual content. Gates, who runs Microsoft and Corbis as two separate businesses, says that the greater provision of imagery in improved high-definition quality will unite all the key components of media gadgetry; from the giant-screened television in the living room to desk-based and portable computers and the tiny mobile phone.
"All of these will have screens", he says, "... and on every one of those environments you will have content, you'll have advertising, it will be stills and it will be video, and if you have interests you can click and we will get you more information. Irrespective of screen size, the idea of a digital delivery system is common to every single one of those things."
In Gates's future world, paper becomes a thing of the past and there are no textbooks, no magazines and (from 50 years or so hence) no newspapers. Instead we will carry an object he calls the tablet, a slim device like a clipboard that will cater for all our information and entertainment needs and will revolutionise our lives within a decade.
"The tablet is the place where it can all come together," he says. "I definitely see the tablet, whether it's textbooks going digital or the newspaper going digital or magazines going digital, I see the person with that very, very thin, - we don't have it yet today - very inexpensive, high-bandwidth, wireless device... where a lot of the print and video consumption will take place."
In this future-world of Gates's imagination, we will have screens, on the walls of our homes, that will recognise our voices and take commands. We will be able to take pictures of barcodes in shops and be informed whether we are being offered a fair price. And we will communicate through fingerprint recognition with cameras in public places, feeding them information that will be stored on our computers at home.
Up close, William Henry Gates III is not, on this occasion at least, as cold and distant as some have suggested. He is focused and matter-of-fact, as you would expect of someone who, in spite of his vast riches, has retained a very hands-on role in his business affairs. His functional navy suit and white button-down shirt (monogrammed with his initials) are enlivened by a purple striped tie. But Gates was not born to be a dandy. He was such a geek in his teenage years that he reportedly allowed his computer obsession to compromise his bathing routine (he now has a home with 24 bathrooms). Yet he is neither cold nor distant, repeatedly punctuating his responses with a laugh or a smile. He gesticulates with the vigour of a southern European, and, beneath the glass of the table, his foot taps away on the carpet, like a jazz musician keeping time.
The foot-tapping and a tendency, not apparent now, to rock back and forth in his chair while speaking have been previously seen of signs of Gates's discomfort under pressure. And he has had his problems. Just before the turn of the millennium, his public profile went into sharp decline. The US government tried to peg back his power by suing Microsoft with an anti-trust suit, because consumers were so dependent on its Windows software, which included the company's own Internet Explorer browser. At the other end of the spectrum, more radical users of the internet were recasting the image of the great pioneer as a corporate monster. "I hate Bill Gates" websites sprang up, the film version of the cartoon show South Park depicted his cartoon character getting shot (some cinema audiences reportedly cheered), and when an anarchist splattered Gates's bespectacled face with a custard pie the moment seemed to symbolise a growing resentment.
Gates's attempts at PR were not always successful. Viewers cringed when the American broadcaster Barbara Walters persuaded Gates (who enjoys a singalong, especially to Broadway numbers) to trill out the words to "Twinkle, Twinkle, Little Star". On a rare appearance on British television he was interviewed by Jeremy Paxman, who deemed him an "awkward, shy, nasal character."
Gates and his demeanour have changed since then. He allowed his colleague Steve Ballmer to become Microsoft's CEO in 2000, taking for himself the joint role of chairman and chief software architect, which allowed him to spend more time in the field of innovation. Once again the pioneer, he is pouring money into research and boasts that "we're the most R&D-focused company in the world."
Just as importantly, at around the same time as he was being dragged through the courts by the US government, Gates became more convinced of the value of philanthropy. Both his parents, Bill Gates senior, a successful lawyer, and Mary, a tireless civic leader who died of breast cancer in 1994, were renowned Seattle benefactors.
Having established the William H Gates Foundation in 1994 after reading about global problems with poverty and disease in the 1993 World Development Report, the Microsoft founder upped his game in 1997, creating the Bill & Melinda Gates Foundation, which now spends more in annual disbursements on global health than the World Health Organisation.
Melinda, who Bill married in 1994 and with whom he has three children, has an active role in the foundation and the couple recently spent four days visiting slum areas in Bangladesh and India to see the charity's work at first hand.
Gates still has his worries in the business world. He admits to frustration that the tablet has not yet taken off, even though he started development on it a decade ago. This month, he unveiled a new ultra-mobile computer with no keyboard that will sell for around £500 and have similar functions to the iPod and the BlackBerry, both of which Gates is eager to compete with. He also wants to take on Google, believing that computer searches can be made more specific and can achieve faster results.
His rivals aren't impressed with the scope of his ambitions and some are co-operating with a new anti-trust crackdown on Microsoft, this time by the European Union. The EU is threatening to fine the software giant two million euros (£1.4m) a day for not co-operating with its inquiries, having already invoked a $592m (£340m) punishment in 2004 for excluding rival programmes from Windows.
When Gates wants to unwind from such stressful matters he often turns to his favourite hobby of bridge, which he frequently plays with one of his closest friends, Warren Buffett, the multi-billionaire investor who also happens to be the second richest man on the planet. Reading is Gates's other great pastime. His literary interests, in line with his business and his charity, range from computer science and artificial intelligence to tackling poverty and disease. He has recently read Jared Diamond's Collapse, an account of how civilisations crumble, and rates the same author's Pulitzer Prize-winning Gun, Germs and Steel, which explains how some societies grew to be wealthier than others, as "one of the best books of all time."
If Gates is known for a single statement in his career it is his 30-year-old dream of hoping to see a computer "on every office desktop and in every home". For this to be realised the current total of one billion personal computers will have to be increased at least six-fold. Does he think he'll live to see this? "Not the notion of 100 per cent of people. The dream of a computer on every desk and in every home wasn't literally every single one," he admits. "I know there's a farmer out there somewhere who never wants a PC and that's fine with me."
But history has proved his point, he feels. "It became pretty obvious that, at least in the developed countries, the PC was a necessary tool," he says. "With PCs, the penetration keeps going up. I remember many years where people said, 'It's peaked, it's over, specialised devices are coming in...' But the PC had a huge year last year."
Asked if he would prefer to be remembered as an innovator, an entrepreneur or a philanthropist, Gates says his place in history is beyond his control. "I don't think you get any choice about how you're viewed," he laughs.
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