Bill Gates talks to Larry King about Windows 95, media partnerships

August 21, 1995
Transcript from "Larry King Live"

[King and Gates] LARRY KING: And now, a great pleasure to welcome to Larry King Live, from out studios in Seattle, one of our long sought-after guests, Bill Gates, the chairman and co-founder of Microsoft Corporation, which introduces Windows 95 this Thursday. Before we talk about that, though, thanks for not wearing a jacket, so you look right in concept with this program. Some items in the news: the Turner Broadcast Company, which, by the way, owns this network, announced today that it was not, not going to buy King World, as had been rumored. The other rumors concerned Microsoft possibly investing in Turner, what can you tell us?

[Bill Gates] BILL GATES, Chairman, CEO, Microsoft Corporation: Well, we're talking with a lot of media companies and Turner is a great company in the news area, and in many other areas, has done great work. And so Microsoft is reaching out to them, talking about, ``What could we do in the interactive worlds? Working with Windows, or perhaps even working together.'' And so, there are talks going on. We are at a pretty early stage. I am a big admirer of Ted Turner's. What's he has done is incredible. And we will see where it goes.

GATES: Yeah, and we wouldn't be in a position to really control or influence that. If the right kind of interactive venture was worked out between the companies, it is possible that an investment would be part of that. But as far as Ted's plans for where he wants to go, he's the best one to ask about that.

KING: So you might well invest in Turner?

GATES: It Turner, one of the things that they have mentioned is that, to cement a relationship on the interactive side an investment might help with that. And so, you now, we will take a look at that as the discussions proceed.

KING: Is that a logical expansion, Bill, for Microsoft?

GATES: I think that it is something pretty new. This whole interactive world where

KING: Yeah.

GATES: More and more people have personal computers and will be using them to gather information, is something that nobody really understands how quickly that will happen. And so, we want to invest in it. So it is...it's kind of a new thing.

KING: And your comments on the federal judge today, who agreed to your signed anti-trust settlement, which previously federal Judge Sporkin had thrown out, is now back in. Any comments?

GATES: Well, that whole thing really has no effect on on Microsoft or how we work. For us, charging ahead with innovative products is the key to whether we will continue to be successful in this high tech world. It's great to see it finally come to a close. Because there were a lot of years there where, you know, we were producing a lot of documents and what it comes down to is that there is nothing significant that we needed to change, and that just confirms the way we've viewed it all along.

KING: Bill, as you look back, and you are only going to be 40 this year, and before we talk about Windows 95, how do you account for Microsoft's success? What if you could step back from it and look at the hardest thing to do is look at yourself what did it for that company?

GATES: Well, I think there is a lot of factors that have to come together, and certainly, timing and luck are major elements. I do think that original vision that computers would become so cheap that lots and lots of individuals would use them as tools and that great software could unlock that power, that is what Paul and ID Paul Allen, my co-founder and I wrote down when we started the company. And it's a vision that, much to our amazement, has largely become reality. So, really, pursuing that and taking a long- term view, in terms of hiring great people, or working out partnerships, never worrying about the next year or two, but thinking was was this the foundation that we wanted to build on? That, along with our jobs, and hiring in lots of smart people, all of those elements have come together, to create a much greater success than we ever expected.

KING: So that is the amazement part? Is how successful it's been, right?

GATES: That's right. The whole direction that software is important and software is cool, 20 years ago we would have said that. But the idea you can build such a large company and have such an effect of empowering people to use these tools, it's, it's beyond my dreams.

KING: Is there any downside to this computer world?

GATES: Ha, ha. Well, I think any

KING: Anything we should worry about?

GATES: Any new tool like this always comes with some drawbacks. Today, I think a kid growing up who has access to a personal computer and great software gets a benefit from that. And so you have to worry, ``What about kids who aren't having a chance?'' Where their classrooms aren't equipped, they can't have it their libraries are at home. And so it is becoming so valuable that you wish that everybody would be able to have chance. And we want to reach out to people in every generation, to have classes, so people can use it, no matter what their age is.

KING: When we come back, with Bill Gates we will talk about Windows 95 which goes on sale Thursday. What's all the hullabaloo? Don't go away. [Commercial break]

KING: We're back on Larry King Live. As we speak, we're being seen in 220 countries and the world is going to be introduced to Windows 95 on Thursday. Let's start with the simplest of all. What is this?

GATES: Windows 95 is a big advance in Windows, and Windows is used to control most personal computers. Other than Apple's Macintosh, the rest of them primarily run Microsoft's Windows. And so we've made it far more powerful and more easy to use. So it's it's a big event for anybody who has got a PC.

KING: Was there a Windows 94?

GATES: Actually it is a new way of talking about the versions. We used to call it Windows 1, Windows 2, Windows 3. The current version is actually called 3.1. And we've moved away, now, from that computer terminology. So when we have a very, very, very big release like this we will take the year, almost like a car model and name it that way. So this is a first.

KING: Does that mean, though, Bill, that we have to worry if we buy Windows 95 and Windows 96 changes the fins?

GATES: Well, no one needs to upgrade unless when they see the new version it's got lots of exciting stuff that really will make them more effective using their machine. With Windows 95 we've been able to do that across the board, with tones and tons of features. And it will be a challenge for us to see if every couple of years or so we can come up with something that this big of a step. It's up to us to prove that to people.

KING: But it doesn't make it outmoded if we buy this today?

GATES: Well, the thing that is definitely outmoded is the current version, Windows 3.1, because there is a big visible difference. And as you get new PC hardware, sometimes you want the new system to take advantage of that. But I think anybody upgrading today can feel safe that for the next three years, if they would like to leave their system alone, this thing will work just great for them.

KING: Can you explain to me, Bill, why the technology is going so swiftly?

GATES: Well, the volume of personal computers being sold is incredible, it is over 50 million machines, worldwide. And now more and more of those are going into the home, as well as into business. And so you have lots of big companies competing to build the best PC and bringing the prices down, and bringing the power of those up. And it also means that more people write software all the time. So no matter what your hobby is, or your interest, what kind of business you have, there is better and better software out there. And, in fact, the way we are connecting these PC's together, using the Internet and on-line services, it makes them more and more of a communications tool, and so you can collaborate, and share ideas. And so I really see the growth continuing, and the pace of improvement, the pace of innovation is driven by competition. And lots of firms, most of them here in the United States, are growing and providing a better product.

KING: True that you are spending $300 million to introduce it?

GATES: Well, that's a little high. If you count not just what we're spending, but all of the computer stores and the hardware companies and the software companies, you'd get a number much bigger than that. We, ourselves, are spending several hundred million. So, it is by far our biggest product launch by a factor of five, bigger than anything we've ever done.

KING: And and what is its cost?

GATES: We sell it to the retailers with a suggested retail right around $100 or a little more. But we actually expect you will see prices perhaps at $100, perhaps somewhat less than that.

KING: Isn't that very cheap?

GATES: Well, we think it's it's a good deal. Particularly because you have invested a lot in the PC and the other applications and you want to get as much as out of it as you can. But when you want to sell a product in the millions like we're planning to here, you've got to have an aggressive price to make it move.

KING: What is your projected sales on this? In other words, do you say to yourself "Here is what we will sell by the end of the year?''

GATES: Well, internally, we certainly have estimates like that. Because we've had to judge how many copies to manufacture. We've actually been building it for five weeks now, so that on Thursday, which is the big day, it will be in all of the stores, and people can go out and get it. We don't really give our exact forecast, but it's many millions of copies that we expect to sell. And the orders that we've gotten from the retailers were actually beyond what we expected, by quite a bit.

KING: By the way can you I will make a car comparison again. Can you get a lemon?

BILL GATES: Well, Windows 95 is the same for everybody who buys it. That is the beauty of digital products, is that there is no variation. It's not like car, where one particular car can be put together poorly and you will have lots of troubles. The what we've got on the disc here is the same for everybody. And it's been tested more than any product in any industry that I am aware of.

KING: And being introduced in how much of the world?

GATES: Well, we've got simultaneous introductions in most of the major markets, except for Japan, Japan will be about 90 days later. So France, German, Spanish, Swedish, Italian, all of the versions for Europe and many, many other countries, go on sale right this week.

KING: By the way, how was your company named? Or is it as simple as it sounds?

GATES: Well, it's, basically we were the first company to ever do software, for microcomputer systems. So we simply took the micro there and we took the first part of software and said, ``Okay, the software for microcomputers, Microsoft.

KING: Before we take a break and take some calls, what, Bill, has all of this done to you? To your life? To have been this kid who came up with this idea, to become, reportedly, the richest man? I mean what is that what is life like? What keeps you going, by the way?

GATES: It's a lot of fun to keep meeting the challenges of doing products that are better. Being able to go out and hire smart people and work with them. You know, I think that I am having more fun than anybody I know. My job forces me to take risks, learn new things, all the time, and so it's a dream come true. And, even looking out into the future, I think it's going to stay as the world's best job.

KING: Do you tend therefore, to have a liking for the Ted Turner's, the risk takers, those who constantly are doing something? Because the rest of the world wonders `` what do you need this for?''

GATES: Well, I am a big admirer of what Ted did. Because he took some big risks and he went through years where people said he was, really had made big mistakes. He went through that several times and yet came out that what he was doing made a lot of sense. And so it's fun to sit and talk to him about what does he see in the future? Risk taking is a neat thing when the end result is a product that people love to use.

KING: John Malone, of TCI, recently on this program said that the computer and the television set, in by the year 2000 is going to do everything in your life, almost. True?

GATES: Well, I am a big believer that you will turn to an information appliance, the future TV, the future PC, to get all kinds of information. If you want to take a trip though, you will still take a trip, it will just be easier to get the information. If you want to go hiking, you can find people to do it with. So you will still spend lots of time outside. But the empowerment of being able to know about what is going on, and meet people with common interests, this interactive world promises to change things quite a bit, and provide new ways of even of being educated.

KING: We're also going to live longer, because of medical advances, right?

GATES: Yeah, that's that's another exciting thing is the way that researchers can use these tools to collaborate. And share their data. And it just means the that the pace of medical and other advances will continue to accelerate.

KING: Bill Gates, Chairman, Co-Founder of Microsoft. This Thursday, Windows 95 goes on sale. When we come back, your phone calls. Don't go away. [Commercial break]

KING: Welcome back to Larry King Live, with Bill Gates, at our studios in Seattle. We go to your phone calls. Windows 95 premiers Thursday. Lagos, Nigeria. Hello.

7th CALLER, [Lagos, Nigeria]: Hello. This is for Bill Gates. In the third world there are thousands of very talented programmers who would cost Microsoft less than one tenth of an equivalent programmer in the U.S. Does Microsoft have any plans for tapping this resource?

GATES: Well, Microsoft wants to make it easy for people to develop Windows applications anywhere in the world. And so we put out lots of CD's, compact disks, with information for developers to make it easy for them to do development. In terms of our own development, though, it has worked out best for us to do that in one location. And so, about 90 percent of our development is done in the United States. And we and that way people can collaborate together. And, for us, the cost of development is not as important as really getting the product on as efficiently as we can, and making sure that everybody is working together. So, although we're going to empower lots of companies around the world to do software development, we will continue to do most of our work right here.

KING: Do you expect good programming to come from third world countries?

GATES: Well, there is no doubt that the talent for programming is

KING: Everywhere.

GATES: worldwide talent. Japanese, Chinese, Indian you know, you name it, there are great engineers. And some of those people we hire into the United States and so liberal immigration is something that we're always a big fan of.

KING: Bainbridge Island, Washington.

8th CALLER, [Bainbridge Island, Washington]: Hello. He knows where that is. I want to ask, when is he going to come up with a program that talks, that speaks to the layman that is over 60. I mean, we people do not, and I've been to several classes, my in-laws have been to several classes, it's all Greek to us. It's like trying to talk to a doctor.

LARRY KING: That is a fair question, Bill. Over 60 most people say, ``What?''

GATES: I think this idea of making the computer easier to use is fundamental to continuing to grow and so that is something that we work on very hard. It's still true today, that, to learn the machine, you need somebody who is a very close friend and can help you out or you need somebody who teaches a class. And then you can go and learn from a class like that. A lot of elderly people, once they get over the hump, it's great for them to use electronic mail, to stay in touch with other people and get the information. And so if if they are willing to make the investment, I think, already, today, it's a great thing. But we will make it easier.

KING: I know how competitive you are, by the way. Is Apple in trouble?

GATES: Well, every company in our business has to keep renewing their excellence. ID I believe that Apple has a very bright future with the Macintosh. But, with Windows 95 people will compare them now to that.

LARRY KING: Mm-hm.

GATES: And so they need to keep their system moving forward. And they have a lot of very exciting work underway.

KING: Montreal, Quebec, for Bill Gates.

9th CALLER, [Montreal, Quebec]: Hello. You are great, Mr. Gates. My question is, if you think that besides the fact that you had a vision at the very beginning, part of your success is the fact that you are a professional, and you continue to be deeply involved in the development, and that you know, as I understand, every secret, every detail, of everything, of everything you have developed.

KING: Yeah, how much of your success, Bill, is hands on?

GATES: Well, I think you have to really be an engineer to run a technology company. You have to enjoy sitting down with the other engineers and talk about what is possible and see where the bends in the road are. And so, I don't think somebody who is just purely business oriented could have a great success.

KING: Why?

GATES: Well

KING: In other words, a great administrator, someone who runs Pillsbury, or who runs a movie company, would not necessarily run a successful Microsoft?

GATES: No, I don't think that's possible, because the technology is so important. And working closely with the engineers, and seeing how to keep them excited about the work environment that they have. That is really fundamental. And you can have a team of people, some of whom are experienced and know business and some of who are technically oriented. But I think it has helped a lot that our, our background is an engineering background. And although I don't get to write the products anymore, I used to do that, so I have an appreciation of how that of how that goes.

KING: We will be back with more questions for Bill Gates. Windows 95 premiers Thursday, worldwide, except for Japan. We will be right back. [Commercial break]

KING: Before we continue with calls, Bill, can you briefly explain what this agreement today, for the benefit of viewers, means to them, the settlement with the anti-trust and the Justice Department.

GATES: Basically it means nothing. There were a period of years where the government was making sure the software market was very, very competitive, which it certainly is. And at the end of it, they asked us to make a few minor assurances, which we did, and now that has been entered by the judge. And the software industry continues on. It's a very fast moving, competitive business.

KING: Were they worried that you were getting a royalty too much royalties on too many items?

GATES: No, they looked at a variety of things. And of course when you get into a situation like that the competitors are all urging the government to spend tax dollars to handicap the company that has been the most innovative. And at the end of the day they found nothing of any significance to be concerned about.

KING: Can you say you are happy with the settlement today?

GATES: Well, it's just it's just that We were we said we were happy when we signed the settlement with the Department of Justice. It's just kind of unusual that it took about a year before it was officially entered.

KING: Well, Judge Sporkin, as you know is an independent guy. From his days at the SEC.

GATES: Yeah, he

KING: Were you surprised when he threw it out, initially?

GATES: Well, he he was a surprise. The whole Yeah, that was a surprising episode. But the Appeals Court did a very thorough job and were actually willing to remove him from involvement. And so it's it's not something that affects any of the new product work we're doing.

KING: No effect on Windows 95 at all?

GATES: No, none.

KING: No. San Jose, California, with Bill Gates.

10th CALLER, [San Jose, California]: Yes, Mr. Gates. The question I have is, when you guys designed Windows 95 were you thinking about the lower income person as well as you were thinking about the middle class and upper class as far as price range?

KING: Good question.

GATES: Well, I hope in all of our products that we are reaching out to everyone. Because I think a PC is a great tool, and that is certainly irregardless of income level. Now to use Windows 95 you've got to have a PC. And good PC's still cost anywhere from $1,200 to $2,500. And, so, to get access for those, you know, schools, libraries, there are a lot of clever ideas that we're going to have to work on to make sure that that everyone benefits.

KING: Is that a statement of Newt Gingrich's you'd agree with ``Give every kid a computer?''

GATES: Well, it's there is already trade-offs in the budget. If somebody can find room in the budget to do that, I think it would be absolutely fantastic.

KING: I mean would you say to any American child, that is one of the best gifts you could give them?

GATES: Yes, if you if you are considering that kind of gift, a PC is absolutely a super thing to give a child.

KING: And if you are bequeathing a gift so say poorer schools or the inner city, give them computers?

GATES: You have to make sure not only that you give the machines, but that you take care of the training

KING: Yeah.

GATES: So that they can be used properly. But, yes, absolutely, these are tools of empowerment.

KING: Back with our remaining moments with Bill Gates. Windows 95 goes on sale Thursday. Don't go away. [Commercial break]

KING: We're back with Bill Gates, the Chairman and Co- Founder of Microsoft who introduces Windows 95 on Thursday. A lot of personal excitement over this?

GATES: It's a real fun thing to work for years on a product. And to be in meetings where you are making trade- offs, and planning it, and thinking ``Hey, this could be big.'' And to see it come to fruition. So, and particularly for the team of developers who have developed Windows 95 and the related products. They are very, very excited. I am enjoying the whole event.

KING: Do you take your work home with you, Bill?

GATES: Well, ID I do in the sense I have a so-called ISBM, which is a high speed phone line? That goes to my house. I take my compact portable with me, when I am traveling around. Do my electronic mail, plug things in. and

KING: Is your wife into computers?

GATES: Actually, my wife I don't say much about her, but she actually does work on software at Microsoft.

KING: Really? Because, I would think, married to you, if you are not into it, you are going to have a pretty dull time of it.

GATES: Well, it's hard for me to say.

KING: I mean but she likes this this world of computers and stuff.

GATES: I don't I don't talk a lot about her.

KING: I understand.

GATES: Yes.

KING: How protective you are. But it's it's interesting to people to know when someone is as involved in a topic as you are, if the people around them are as involved. They are?

GATES: Yes. For many years, the first decade I worked on personal computers, I always told my relatives they were too hard to use not to buy one. Because I thought they would have too many questions. But for the last five years, I've really encouraged all of my family to use PC's. And it's a lot of fun. we even can send electronic mail to each other.

KING: Stockholm, Sweden, last call for Bill Gates. Hello?

11th CALLER, [Stockholm, Sweden]: Hello, Larry and Bill.

KING: Hi.

11th CALLER: Question: what would you be doing if you did not work with computer software?

GATES: That's a good question. I think I would have gotten involved in math, or physics, or possibly economics. But, I love hard sciences where if you make and advance it is quite provable to everybody in the area, and I thought those were such interesting areas. In fact, when I went to Harvard, I thought that the whole computer thing had been sort of a boyhood hobby, and I would move out to the real world. And it was only when I realized that computers in the real world were really coming together, that I thought I could have the best of both.

KING: So you're still living your childhood, in a sense?

GATES: In a sense. I am having as much fun as any.

KING: It shows.

GATES: I know.

KING: Thanks, Bill.

GATES: Thanks.

KING: Good luck. Bill Gates. Windows 95 goes on sale Thursday. Chairman and Co-Founder of Microsoft. We want to say goodbye to one of the great broadcasters, who passed away the other day. J.P. McCarthy was the king of Detroit. He was class personified, in a day and age when that is often lacking in radio, J.P. McCarthy was a standout, and we will all miss him. Thanks for joining us, and good night.

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The preceding text has been professionally transcribed. However, although the text has been checked against an audio track, in order to meet rigid distribution and transmission deadlines, it has not yet been proofread against videotape.

Bill Gates talks to Larry King about Windows 95, media partnerships

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