HEADLINERS: BILL GATES

BILL GATES A billionaire genius, he strove to turn the info superhighway into a virtual marketplace

FOR MORE THAN A DECADE HE HAS TOWERED OVER the world of computing like a boyish, tousle-haired colossus, controlling the software that runs our desktop computers and helping transform a hobbyist toy into the engine of a $100 billion industry.

But this was the year that Bill Gates, chairman and co-founder of Microsoft, rose above the confines of computer land and became a global celebrity, an icon of the information age. He wrote a best-selling book, The Road Ahead (Viking; $29.95), and hawked it on talk shows from David Frost to David Letterman. He commandeered the world press to promote the launch of Windows 95. He defied government probes of his finger-in-the-eye business practices, even as he was leveraging his control of computer software to edge his way into banking, retailing, interactive television and Hollywood. His net worth ballooned to nearly $15 billion, making him the richest self-made man on the planet.

His is the ultimate revenge of the nerd. Outplotting, outprogramming and above all outthinking his competitors, he rose to the top of an industry that is driven by shifting alliances, rapid technological changes and the steady drumbeat of Moore’s law (after Intel co-founder Gordon Moore, who observed that the power of silicon chips doubles every 18 months). Nobody navigates these turbulent complexities better than Gates, who understands as few do that the great lever of wealth and power in the digital age is not hardware or even software but control over the standards to which others must adhere. Today on 9 of every 10 personal computers those standards are Microsoft’s.

Gates is as fearful as he is feared, and these days he worries most about the Internet, Usenet and the World Wide Web, which threaten his software monopoly by shifting the nexus of control from stand-alone computers to the network that connects them. The Internet, by design, has no central operating system that Microsoft or anybody else can patent and license. And its libertarian culture is devoted to open–that is to say, nonproprietary–standards, none of which were set by Microsoft.

Gates moved quickly this year to embrace the Net, although it sometimes seemed he was trying to wrap Microsoft’s long arms around it. He launched the Microsoft Network and–over the objections of America Online, CompuServe and the U.S. Justice Department–bundled it with Internet-access software in Windows 95. He dropped his resistance to a number of de facto Internet standards, including Sun Microsystem’s Java. Meanwhile, he began securing high-profile content to put on his own network, luring commentator Michael Kinsley from cnn to start an online political magazine and purchasing the Bettmann Archives, one of the world’s greatest collections of historical photographs. Last week he appeared in an electronic press conference to announce that he is teaming with NBC to create a 24-hour news service that will compete with CNN, both on cable TV and online.

In Gates’ vision, the information superhighway leads not to a global village but to a virtual marketplace where, by a process he calls friction-free capitalism, buyers and sellers can exchange goods and services without paper money, malls or middlemen. Except, of course, for the ultimate middleman, Microsoft–which, in return for making those electronic transactions secure and reliable, plans to collect a small toll off each and every one.

Will Gates succeed in doing for the info highway what he did for desktop computing? Microsoft seems to be leaving little to chance. In December the Justice Department issued a new round of subpoenas as part of an ongoing investigation of Microsoft’s Internet strategy. The latest complaint: when Windows 95 users try to connect to the Net, Microsoft’s software wipes out the Internet settings of its rivals. Company executives offer no apologies. In a statement that could serve as their chairman’s credo, they insist that the problem is caused not by any flaws in Microsoft’s software, but by the weakness of its competitors’.

–By Philip Elmer-DeWitt