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Larry King Live Weekend

Millennium 2000: Bill Gates Discusses Microsoft, Philanthropy and the Future of Computers

Aired January 1, 2000 - 9:00 p.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

LARRY KING, HOST: Tonight, the richest man in the world, a key player in an industry that's changing everybody's life. Microsoft's Bill Gates joins us from Seattle for the hour, he's next on LARRY KING LIVE.

We're in Redmond, Washington, to kick off the new millennium. What a guest to begin it all here on this January 1, 2000, Bill Gates, the founder, chairman and CEO of Microsoft. We're at Microsoft headquarters in Redmond, Washington. Let's start right from that. This is a profile of Bill. We'll touch a lot of bases.

Why Redmond? Why are you here? Why are you not in Chicago?

BILL GATES, FOUNDER, CHAIRMAN, CEO, MICROSOFT: Well, I grew up here, and I went to school with a friend, Paul Allen, and...

KING: High school?

GATES: And he and I had a dream about what computers could become. We personally wanted to own them, we wanted to use them as tools.

KING: Were you, like, computer freaks?

GATES: Well, we did our best to get computer time. We were the ultimate computer nuts.

KING: You were?

GATES: And this is when computers cost millions of dollars, and so it was very hard to get access. But we talked about a day when computers would be personal, and that the software part was something we thought we could do better than anybody else.

KING: Then you went on to Harvard, right?

GATES: That's right.

KING: To major in?

GATES: I switched around. I was in economics, math, different things, but I actually didn't finish my...

KING: I know.

GATES: ... time at Harvard. Paul came back to be with me. We brainstormed about what we ought to do. And that's when the first computers on a chip -- very inexpensive microprocessor based machines came out. At first they were kind of useless, but we saw that was the ground form. We decided we had to be there for that.

KING: Were you at Harvard when that started?

GATES: That's right. I was a student there, and you know, I'm on leave, I'm a dropout, whatever you want to say.

KING: Were your dreams of -- were your dreams money or were your dreams invention?

GATES: Paul and I -- we never thought that we would make much money out of the thing. We just loved writing software. You know, we thought that software had a certain intricacy, a certain elegance. And the idea of using software to empower people, whether it's letting them communicate new ways or create rich documents, you know, we saw that software was sort of an unlimited thing that we kind of understood. Most of the people in the computer industry thought about the hardware piece. But we had latched on to software...

KING: What goes in.

GATES: ... as the key element, and we knew we could go somewhere with it.

KING: So you opened here because this was home?

GATES: Well, actually we -- our first customer was down in Albuquerque, New Mexico. So I left...

KING: Who was it?

GATES: It's a little company called MITS. At the time, it was the first company with a kit computer. You could send in about $300 and you got a bag of parts, and if you were lucky enough to get it assembled right, the lights would blink. That was about all this machine could do.

KING: But they liked something you had.

GATES: But that was the beginning. Yes. We went down to them and showed them that we had a software program called Basic that would let people write programs for their computer and so they became our first licensee.

KING: How did you name this company?

GATES: Well, Paul and I talked about a lot of crazy names.

KING: Like?

GATES: You know, Incorporated. Outcorporated, or you know, Unlimited Software...

KING: Two Crazy Guys.

GATES: ... or do we want our names to be part of it. But the most natural name was to say -- was Microsoft. To say that software for these new machines that were very personal in nature and so there would be a range of software that was quite vast compared to what those big expensive machines had, had. And we were the very first. There was no one else doing software for those machines. We could pick any name that we wanted, and Microsoft was the natural choice.

KING: Going back a step, do you know where that interest in this came from? Were you the kind of kid in 8th and 9th grade who wanted to see the science class?

GATES: Well, I was...

KING: What -- was math your excitement?

GATES: Yes. I was in a very nice school -- private school here called Lakeside, and I had a lot of free time, because I had gotten ahead in math and -- so when this first computer terminal showed up, everybody was confused about how to work it and...

KING: And you weren't?

GATES: Well, I was more -- I really persevered in trying to figure it out. The teachers actually got afraid of it, because they accidentally did something that cost a lot of money by making a mistake on it. So the students, myself and Paul and a few others kind of took over, and we taught the computer classes, and we were just wild about what it could mean, what it could do. So, yes, we were all absorbed in this incredible thing.

KING: What a story. What did your dad do?

GATES: Well, my dad is a lawyer. And my parents -- they wanted me to moderate my sort of extreme activities of sneaking out at night, going to the computer center. They wanted me...

KING: Oh, you did that?

GATES: ... to be a little more rounded. My senior year of high school I took a job for TRW to do software programming. It was very nice of them to let me go off and learn quite a bit by doing that. But they really wanted me to go to Harvard to have a normal undergraduate experience, but then when I said to them, hey, it's time for me to go start this company. They thought, OK, that will probably not amount to much, then I could go back. I mean, I really am officially still on leave.

KING: So let's let him have his whim and Billy will get over this?

GATES: Yes. And they were supportive. I mean, they wanted to let me try out new things, and -- so they, you know, they were perfect parents as far as encouraging all my curiosity.

KING: Where was Microsoft's first office?

GATES: We were down in Albuquerque, New Mexico for the first four years and...

KING: Oh, you went down there?

GATES: Yes. We were there from '75 -- 1975 to 1979. Then we moved up here to Seattle, because that customer had become a very small part of our business. In fact, they had moved to another city.

And so the big question in 1979 was whether to go to Silicon Valley and be where Intel was -- and it was the Intel chip that was really making this all happen -- and that the -- so the center of activity was there -- or to come back to the city we had grown up in, where the quality of life, being with our relatives, being able to hire people to a great area made that more attractive and, so, we decided to come here. And we only had about 14, 15 employees when we came. And then we got an office a few miles from where you and I are -- where we are right now and we grew from there.

KING: Microsoft has own its television setup, its own studios, et cetera. We are there as their guests tonight, with all their stuff here. We'll continue the saga of Bill Gates on this edition of LARRY KING LIVE to begin the millennium.

Don't go away.

(BEGIN VIDEO CLIP)

ANN RICHARDS, FMR. TEXAS GOVERNOR: I think you're going to see more of what's called direct democracy, so that you're going to see people actually voting on their computers at home, registering how they feel about issues that go directly into the offices of elected officials from the computers.

PETER JENNINGS, ABC ANCHOR: Well, I hope that all of us will come to be sympathetic with technology and the technology won't rule our lives in the next century. I think it's reason to be cautious if not nervous.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: As kids from Brooklyn always like to say, we pinch ourselves over what's happened, because no one figured this would happen. Certainly, I never figured this would happen to me. Do you pinch yourself?

GATES: Certainly.

KING: Yes. Do you say, wow?

GATES: Well, it's amazing to have had a dream about something that we could do, that we could hire our friends, that we could dream about the power of software and that it would really come true and it would actually change the world. So, you know, it's a wild thing to have something like that come to fruition even more than we ever expected.

KING: You were telling me during the break that in high school you were more athletic than Paul, even though Paul owns teams.

GATES: That's right. Both of us in school were known as math...

KING: Wizards.

GATES: ... and computer guys. Eventually, we were spending enough time down there, that was how people thought of us. So the whole thing where Paul has become a real sports fan, that developed later. We got one of those Barcode projection TVs when we first made a little bit of money and started watching basketball games and kind of got addicted to it.

KING: What did it? Was there a turning point, a date, an event that made it for Microsoft?

GATES: Well, it's hard to say. The most important thing we did is figure out how we could take all these computers from different companies, what are now called personal computers, and make them compatible, so you could buy from Dell, Compaq, Hewlett-Packard, any of the manufacturer, and run all the same software. And that was a huge risk, because before that, all the computer had made incompatible machines.

KING: You had to use theirs for theirs.

GATES: That's right. And the whole philosophy had been low volume, high price. These are machines for businesses. There going to pay millions of dollars to buy them. People like Digital Equipment had come in and brought the price down hundreds of thousands. But the idea you could have one that cost, say $1, 000, that really required compatibility. And we came out with that concept, and it took us about five years for that to really succeed. And now people take it for granted. You just think, OK, all those personal computers, they kind of work together. I...

KING: There was a time, wasn't there, when your personal computer was the thing that fell out of the closet when you opened it? People didn't use it a lot at the beginning, right?

GATES: It was a hobbyist sort of toy. You had a few games you did on it. But you wouldn't really on it to do accounting, and wasn't a communications tool. You didn't think, OK, my electronic mail is the way I stay in touch with my relatives and sending photos around, sending music around. So every year, there's been a progression of what a crucial tool it's been.

And those first few years, I mean, we were crazy, because the machine could hardly do anything. But we still -- we knew where it was going, and we took one step at a time and made the software better and better.

KING: All right, Bill, we're going to skip around a little bit. How crucial, you use the term, is it now? How crucial is it to our living today?

GATES: Well, I think the personal computer, particularly the way that they're interconnected onto the Internet now, and that's the place that research is done, that's the place that business is moving all their transactions, it's really become as important as the telephone system. You know, if the Internet went down, which fortunately, it's structured to make that extremely unlikely, but say it was completely down for a week, the cost, in terms of productivity, would be a mess.

KING: Really?

GATES: It's just electricity, phones, water. A lot of these things we take for granted now.

KING: Let's say Y2K was chaos, it turned out -- by the way, were you surprised that everything went well?

GATES: No, in terms of infrastructure, things like elevators, and planes and missiles, I thought people would be able to do a great job making sure there were no dependencies there. There is going to be a -- in the months ahead, you're going to hear about billing system or tax-related software that's going to get screwed up. It's not going to be catastrophic I don't think in any case, but there's going to be lots of snafus that haven't been...

KING: Don't rest on laurels then.

GATES: Yes, there's still a little bit of a mess there that will be cleaned up. And it ended up being a fairly minor issue because people really worked together. I mean, if people had ignored the thing, then we would be seeing some real impact.

KING: But if it went down, that's chaos?

GATES: If the system in the U.S. goes down, if the Internet goes down, those are both huge problems, because it is becoming the basis on how people stay in touch.

KING: Back to the thing that was compliant with all the units -- did you invent it?

GATES: It was myself, Paul Allen, I would say the two of us had that idea.

KING: Without being technical, what was the difficult thing you had to overcome, without taking me into machines, of which I know zip?

GATES: Well, everybody who makes a computer wants it to be different. And so they want the software that runs on it to be specially written for their machine. But if you have to write software once for Dell once for HP, once for Compaq, once for IBM, then you couldn't afford to do all this nice software. And so the idea that you have something like Windows, that sits there and hides the differences of the machines and let -- and yet, let's some of them be fast, some cheaper, that required a lot of technical thinking. In fact, there were a lot of people in the industry who said that would never happen.

KING: Were there failures?

GATES: Oh, yes. In the early days, people tried to still make incompatible machines. And it was really -- when IBM PC came out in 1981, although that was the defining event, it took another three years before people realized that the standard really had been set; between our software and what IBM had done, that that became the defining point for what we now call the PC.

KING: Do you ever want to make hardware?

GATES: No, that's one thing that from the very beginning we decided not to do, because the whole way that you hire software people, the way you motivate them, the kinds of things you care about. If you want to be a great software company, you have to be only a software company -- you can't dabble in other things.

KING: Back with more of Bill Gates, who celebrates tonight -- and we're happy to have him with us -- his sixth wedding anniversary. We'll be right back with Bill Gates, the founder/chairman/CEO of Microsoft.

This is LARRY KING LIVE. We're in Redmond, Washington.

Don't go away.

(BEGIN VIDEO CLIP)

HUGH DOWNS: One of my hopes would be that my children and grandchildren would live to see as much social and cultural progress as we've had technological progress.

ROSIE O'DONNELL, DAYTIME TALK SHOW HOST: I think the best thing that can happen in the next century is a reassignment or reassessment of everyone's values and I think the nation's values and priorities. I think that would be an amazing thing, if spiritually, everybody could get on a higher level.

JIMMY CARTER, FORMER PRESIDENT OF THE UNITED STATES: I think there's going to be an element of excitement and challenge, and particular, deep inspiration for how will my life be changed with a new start in a new millennium. So I think it's going to be a very wonderful event.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: By the way, you'll notice we're showing you highlights of what lots of our guests had to say about the millennium. We are in the year 2000 officially everywhere in the world. We brought you through all that yesterday on CNN. That was quite an event.

Our guest is Bill Gates, the founder and chairman and CEO of Microsoft.

What was it like to suddenly have all that money? We can imagine that, but what was it like?

GATES: My life has really been the same ever since I started Microsoft. I work hard. I come in and think about what the next challenge is. And when you've got a job that's -- where there's something very exciting, where you get to work with smart people, the fact that you're ownership in the company, which is where my wealth comes from, is adding up to a big number, that's, in a sense, it's daunting, because you're always compared to that as you make the companies better and better and make the products better.

But there was never a point where I said, jeez, I have this money.

KING: Never?

GATES: No. I mean, I remember joking around with Warren Buffet when he and I got to be friends about how the Forbes listed had created a focus on that, and you know, we had -- we laughed a little bit about that.

KING: Are you embarrassed by it? I mean, do...

GATES: I'm not embarrassed by it. In fact, you know, it's created a huge opportunity for me in terms of taking that wealth and being a great steward of those resources on behalf of society, saying, what are things that this could go back to? I don't happen to believe in passing along that kind of wealth to my children, and so I want to be smart about putting in a foundation and having the foundation pursue the causes that can make a difference.

KING: Why would it wrong to give that much to the little boy and the little girl?

GATES: Well, don't get me wrong, I'm going to make sure that they're well taken care of.

KING: You're not give them...

GATES: They never have to have great worries about material comfort. But then again, I'd like them to feel like they need to go out and work and have a job. I think the burden of being a kid who's got that money given to you as opposed to going out and earning it actually can be a negative thing. From the point of view of society, you know, where do these resources belong? I think they belong advancing medicine, advancing access to the great advances of this age.

KING: Do you know on any given day how much you are worth?

GATES: No, absolutely not. KING: Do you carry a lot of money around?

GATES: I carry enough money to buy lunch at McDonalds.

KING: You might have $20 on you or something, right? You don't...

GATES: No, I carry hundred dollars.

KING: And it would fluctuate everyday, right? You would go up and down based on holdings and movements of stock and the like.

GATES: Yes, what I mostly have is a something like 20 percent of Microsoft. And you know, Microsoft is a company in a very competitive business. We'll Have our ups and downs. But you know, we've built a huge company, and you know, that's generated the opportunity.

KING: Did you get too huge, in view of that lawsuit, and the government and the monopoly, and I'm not going to dwell on it, because there's so many things to cover with you. But did you, in retrospect, get too big?

GATES: No, absolutely not. In the computer industry, we're not nearly the big company in this business. IBM, despite all the troubles they went through, is today, in terms of revenue, four times our size, in terms of people, 10 times our size. And so it's a tribute to the cleverness of the software we've done, that even despite that, we're in every account. Every company you can think of, IBM so many more people in their trying to influence their decisions. Despite that, our software has become incredibly popular. And that's something that only happens if the product itself generates word of mouth and generates the momentum, because...

KING: What went wrong then? What caused this?

GATES: Well, certainly, I can't look into the minds of the Department of Justice and explain why they filed the lawsuit against us. It's a mistake. This is a case where the industry is working well for consumers. Prices have never come down like they have in the arena we work in. Software advances are coming every couple of years. No one has a product in our business that's going to last more than two or three years. So if you don't advance your R&D, if you don't think about, OK, what does this means for the phone, and the TV and speech recognition, you're going to be wiped out. And so it's capitalism really at its finest, making empowering tools that have made America the envy of the world, creating jobs and new companies.

KING: But you were never looking to make it so that if I didn't have you, I couldn't use anyone? That was never -- which is a monopoly -- if I don't go to you, I can't go anywhere.

GATES: People -- believe me, people have choices in the world of software. People can by a MacIntosh. They can buy a free-op (ph). They can get a for a free and operating system called Linux. There's lots operating systems out there. And the way the Internet is advancing, you'll have so many ways to connect up -- you know, TV, telephone -- all these different ways. So we can't rest on our laurels. There's Nothing we've got that people have to buy again. You know, if you happen to pick Windows, fine, I don't get any more revenue from you in the future. I have to come up with a version that is so good that you want to take the trouble to learn the new version, put it on your computer. Make sure your stuff works. And that's where we get 80 percent of our revenue, is people who've already got Windows, but we do such a great job of advancing it.

KING: You've got to make me want to come back to the restaurant.

GATES: That's right. And so, you know, it's up to us to make sure we're hiring the smart people and making the products better.

KING: More in a moment with Bill Gates. He's our guest for the full hour. We will include some of your phone calls as well.

And again, we're showing you highlights of what other people think about the year 2000 and beyond.

Don't go away.

(BEGIN VIDEO CLIP)

MERV GRIFFIN: I think you're going to have communications rooms, where you can communicate live with each other, or you can do it through your screen, or your computer or everything you use will be in that room.

TONY ROBBINS: The combination of technology and the extension of the human life is going to give us a new challenge, and that is that technology is going -- moving more rapidly than the technology of our managing ourselves, emotionally and psychologically.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: We're back with Bill Gates.

You were very contentious during your deposition. Were you, in retrospect, sorry about that?

GATES: Well, I don't know...

KING: I didn't see it.

GATES: Anybody who's ever been in a deposition understands it's not really something that you look forward to, but it's very important that you get the facts across, that you don't let a lawyer put words into your mouth.

KING: Not easy.

GATES: Well, if you have a lawyer who is trying to put words in your mouth. Certainly in this case, there was that, you know, kind of pushing that a tough lawyer will do. KING: Were you embarrassed that some competitors called you Don Corleone, and that dealing with Microsoft, that you guys are "take it or leave it" kind of people? Were they wrong?

GATES: Well, that kind of an insult is -- it's upsetting that anybody would say that about anyone. I don't know what your referring to.

KING: Someone said one of your competitors said words to that effect, that a meeting -- Marc Anderson, co-owner of Netscape, said, it's like a visit from Don Corleone, meeting with executives. I expected to find a bloody computer monitor in my bed the next day.

GATES: That's really very unfair. That's Marc Andreesen, I think.

KING: Andreesen -- I'm sorry, yes.

GATES: You know, there's asymmetry here. We never say anything like that about our competitors. We have a lot of respect for them and the work they do. This is a fast-moving field. And it's too bad, you know, kind of like in politics, that some people stoop to that.

KING: Is this suit going to be settled well, do you think? After all, it's an...

(CROSSTALK)

GATES: Hard to predict. There's a lot of energy going into that. That would probably be the ideal outcome. But we'll have to see. You know, we're in the middle of that right now.

KING: Optimistic?

GATES: A very experienced judge has been picked to sit down. And we'll see if we can't pick through and find a good outcome here. So I'm pleased that that's happening, but it's tough to make a prediction.

KING: You're more public -- you were more public in 1999. Any reason?

GATES: Well, I think, over the last decade, the whole story the personal computer and how that's gotten tied into the Internet, year by year, my role of saying, hey, this technology is having a big impact, here's the things we have to guard against, here's how we can get it into the schools. The interest level in technology has risen unbelievably. Ten years ago, it was like we were a bunch of obscure guy who we knew we were on to something, but it was our secret. Now it's almost like you go home and you wish you could pick up one magazine that wasn't talking about the Internet and what's going on.

KING: So you decided you'd come more forward with it?

GATES: No. I think in terms of time, it's about the same year after year. KING: Really?

GATES: And it's just the visibility.

KING: You're much more animated. You're much livelier.

(LAUGHTER)

GATES: I wouldn't say that.

KING: Maybe it's your happy life. You've got a wonderful family. You've got kids.

GATES: Well, certainly I'm very lucky. All the things I have at home are -- couldn't be more amazing.

KING: Doesn't that add to your wanted to be more open and the like?

GATES: Well, to my friends, but not -- it doesn't -- certainly doesn't motivate me to want to...

KING: But don't you like talking about your industry and your field? Don't you -- you seem to enjoy it a lot.

GATES: There's parts of that that are really pretty fantastic. The thing I like the most is being with the software engineers here at the company, sitting saying, OK, what are we going to tackle next? Is it too ambitious to try to do handwriting recognition? Is it too ambitious to try to do speech recognition? And where we talk, well, what approach could we take? How could prove that out? That's the thing, workwise, that I love the most.

KING: We'll ask you what's next...

GATES: OK.

KING: ... when we come back with Bill Gates on this edition of LARRY KING LIVE.

Monday night, a little change of direction. Monica Lewinsky will be with us.

Don't go away.

(BEGIN VIDEO CLIP)

JACK FORD, ABC NEWS: I think with the legal system need to do in the millennium is reach out for the public and say, you can trust us. We do what your tax dollars are paying us for.

JOHNNIE COCHRAN, ATTORNEY: When you look on the Supreme Court in Washington, it says equal justice under law. You translate what's on that building into the actual system,

(END VIDEO CLIP) (COMMERCIAL BREAK)

KING: The new "Entertainment Weekly" issue has a fascinating interview with Bill Gates, focusing solely on computers and the entertainment industry. And you said things that -- that music companies will get their product out, CDs will become obsolete. What's it going to be like? How are we going to be entertained?

GATES: Well, the great thing...

KING: And how far away is this?

GATES: Well, I'd say in the next five years, entertainment will be redefined. The way that we think about TV channels and we think about going out and having a collection of CDs, where we have to open up the case and put it in there...

KING: Gone.

GATES: ... that will go away, because you'll be able to take the songs that you like and organize them the way that you want. You know, pick the mood you're in, pick the thing that you care about and have a little device that you carry around with you or...

KING: You've got something to show us?

GATES: That's right.

KING: Let's bring it all in.

GATES: OK, and so it won't just be computers that are changing, it will be the -- OK, this is a good example. This device here can hold...

KING: It looks like a cell phone, but it's not,

GATES: Right. You just...

KING: Let me show it.

GATES: This little chip here contains hours of music.

KING: I'll show it, you describe what I'm showing.

GATES: OK, so what you do is you take a song from a site where, hopefully, you pay for it and license it, download it into your computer, and then you put into this device. And then if you want to play it, you just, you know, push the button here and you pick exactly the song you want,

KING: Give me an example,

GATES: OK, let's -- well, it's paused right now. And let's see if we can plug that in,

KING: Plug that in, GATES: So this is in a digital format. And so we've got a song that's just one of the many that we put on to this little device,

KING: Hey, something's coming.

GATES: That's it. That's the song.

KING: Can we raise the sound? Is this your kind of music?

GATES: Not that one,

KING: Not that one. So you can just literally remote control your...

GATES: Yes, you skip around. And if you ever want to change the songs you've got here, you just take this little chip, put it in your PC and pick another set of tunes, and literally in a few seconds it's set up with the new music,

KING: How does it get in a chip?

GATES: Well, it all starts with the music label. Instead of printing disks, they'll have a site on the Internet where the actual song is stored. And they may have little snippets you can listen for free, but if you want the real song you have to pay some kind of price for it. And then it comes across the Internet, gets into your PC, and then the PC sends it on to these little devices,

KING: Are we going to have handwriting? Are you going to be able to...

GATES: Well, that's going to take a few years more. That's a big project here at Microsoft is this idea of a tablet personal computer. When you go into a meeting, instead of taking notes on a tablet, you'll actually have that nice screen. And we'll make it as comfortable as writing on a piece of paper. That's one of the projects that we've got some incredibly smart people on, but to do the software right for that will probably take us three or four years,

KING: Let's take a call for Bill Gates as we move on.

Norristown, Pennsylvania, hello.

CALLER: Hello, happy New Year's to both of you.

KING: Hi, same to you.

CALLER: Thank you. My question to Mr. Gates is will you ever run for president? And do you think a businessman would be a better president than a politician? Being a businessman and a inventor, would you be willing to listen to inventions and ideas that my husband would have and to get the...

KING: Well asked, OK, politics,

GATES: OK. Well, I personally don't see myself ever running for political office. You know, my life's work is software, with now, you know, in addition making sure my foundation is picking good causes...

KING: I want to ask about that in a minute.

GATES: ... doing good things. And so I think between those things and my family, you know, that's really going to be my life's work. And I don't -- you know, I don't have the skill set or the desire to get off into the political realm,

KING: What about a businessman as president?

GATES: I think the idea of picking somebody with a business background to be president, sure that could be a great thing. You have to look at the individual. You know, we've had people with military backgrounds who have been quite good leaders. It's pretty uncommon not to have a professional politician, but I'd be open-minded to somebody who comes from that world.

KING: In other words, you wouldn't say, I wouldn't not vote for a businessman?

GATES: No, and I think, you know, some might be very good. A lot of businessman wouldn't -- wouldn't adapt very well to the political process, the give and take, the...

KING: Compromise,

GATES: ... the whole thing that has to go on there. It's a bit different than in the business world. They both have their pluses and minuses.

KING: By the way, did you almost buy into CNN? Ted Turner and everything? Did that almost happen?

GATES: We were talking with Ted. We had a vision about how he could take the incredible work he'd done and get it on to the Internet, and then...

KING: That close?

GATES: I'd say if Jerry Levin at Time Warner hadn't decide to buy Ted's company and partner up with him, we probably would have reached a deal and been a partner with those guys. As it was, we ended up in partnership, actually, with NBC, doing some Web sites...

KING: Now you're a competitor.

GATES: ... and, you know, that's done very well,

KING: Are you happy with that?

GATES: Yes, it's a case where our expertise, which is the technical software side, and the NBC expertise has come together very well,

KING: But it would have worked with Ted, too,

GATES: Oh, I -- that would have been a great combination, too.

KING: You and Ted are out to end polio in the world? You're going to vaccinate everybody?

GATES: Yes, it's been fun talking to Ted not only about the Internet media but also about philanthropy. He's been pretty outspoken, saying that, you know, the world at large with all these people doing so well haven't been doing enough philanthropy, and although I'm not as pushy on that as he is, I think he's got an interesting point there. And we've come together to go after the eradication of polio. This is a disease that over the years has killed millions of people, and it's now down to a level where if we just make a push in the next couple of years, get some money raised, hundreds of millions of dollars that should be doable, we'll be able to wipe this out,

KING: Most people in the United States think it is wiped out.

GATES: No, smallpox is the only disease that's been wiped out. And polio is within our grasp. And so, you know, that's the kind of thing that everybody can feel very proud about, because the benefits of not having to worry about that ever again are fantastic,

KING: Back with more of Bill Gates on this edition of LARRY KING LIVE, as we begin the new century.

Don't go away.

(BEGIN VIDEO CLIP)

GEORGE BUSH, FORMER PRESIDENT OF THE UNITED STATES: I'm an optimist about the next millennium, what kids in college are going to be going into when they get out of college into the next chapter of their lives, because I don't -- we have no other superpower adversary. And I think that's a big jump forward.

Boy, I wish I were 35 instead of 75. It's going to be a great millennium.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: All right, speaking of philanthropy, we talked about polio and health. What do rich people owe back? What do you owe to give? You don't technically owe anything, do you? Right? You don't have to do anything,

GATES: No, there's no requirement at all, and so the question is...

KING: Moral.

GATES: ... can you find something that you really believe in and that you think can make a difference? And do you think that's the best way for those resources that you've been lucky enough to come into, that they can be utilized?

KING: So how do you choose?

GATES: Well, in my case, it really has to do with the great advances, the advances in medicine and the advances in technology. You look at the U.S., we take for granted that our kids get all these vaccination and that infant mortality is incredibly low here. And yet in the world at large, which is, you know, the world where most people live, infant mortality is very high. And it wouldn't take much to save millions of lives.

So something like that really captures my imagination and makes me think, well, what's missing? What could be done? And so it's -- it's making sure that the advances are available very broadly. That's sort of the theme of all the things I've gotten involved in,

KING: Has having children yourself affected this thinking?

GATES: well, it's very interesting. I, you know, I grew up in a close family. I always kind of knew that I wanted to have kids. I knew that it would surprise me that I had no way of thinking about, because I'd been so career-oriented, and so getting married was a big milestone. And having our first kid was so much more special than I expected, you know, just wanting to go home and sit around and kind of just play, basically,

KING: And lucky she's healthy?

GATES: Yes, she's got all those great things that we take for granted. And I think it really reinforced this idea of, you know, what is it that people care most about? When people think of my philanthropy, they might think, well, why isn't he just giving away computers and software? And some of that is being done. Every library in the country is being equipped. But a lot of it has gone to this medical activity, because health is a much higher priority than computers or other things,

KING: You think we're entitled to health?

GATES: I think that we could have the goal that every person in the world would have the same type of healthy life that people in the United States have. That's achievable within the next 20 years,

KING: Let's take a call from Jakarta, Indonesia for Bill Gates -- hello.

CALLER: Hello. Hi, Larry, my name is Dreta (ph). I'm calling from Jakarta, Indonesia,

KING: Yes, what's the question?

CALLER: Yes, does he plan to help our school outside the United States become computerized and learning tools? Perhaps he can put up a computer lab center in Indonesia since this is a big country and it's developing. Thank you.

KING: OK, thank you -- learning tooling in Indonesia?

GATES: Well, the idea of making sure that libraries and schools all around the world have computers, I think that's another goal that we ought to have. If a kid has curiosity, he ought to be able to go to the nearest library or part of his school experience and have the whole Internet there. And that kid will have more at his fingertips than I had, you know, even with the great education opportunities...

KING: So do you give equipment to schools out of the United States?

GATES: We've gotten involved in some of those projects. Most of what we're doing outside the United States is medicine-oriented right now. The early computers and software things have been mostly here in the United States. We're just now expanding that outside the United States, and we've had a couple of good successes there,

KING: I'm going to ask Bill Gates what today's kid will have to look forward to that we didn't have to look forward to and maybe look at another, for want of a better term, gadget or two with Bill Gates, the founder, chairman and CEO of Microsoft on this special millennium edition of LARRY KING LIVE.

We've had quite a month, and this winds it up, boy, with the appropriate guest.

Don't go away.

(BEGIN VIDEO CLIP)

DONNY OSMOND, ENTERTAINER: I have no plans right now.

KING: No plans?

OSMOND: I have no plans, but all I know is I will not be on an airplane because my wife is adamant about Y2K and the problems associated with it.

LEEZA GIBBONS, TALK SHOW HOST: I plan to have my family close by. I don't want to be anywhere near a plane, because I believe all of that. I do.

BOB SCHIEFFER, CBS NEWS: I'm going to stay home. I'm not going to go up in an airplane because Y2K scares me to death,

(END VIDEO CLIP)

KING: We're back with Bill Gates, who's got me holding something here. What is it? What am I holding?

GATES: Well, this is a prototype of what we call the electronic book. And the idea here is to make the text on here such high resolution that you'd be as comfortable holding this as you sit in bed and read at night, whether it's a fiction book or a school textbook, as you are with paper. Then the idea is that you can download the latest novels... KING: It's "Alice and Wonderland."

GATES: That's what we've got on this.

KING: So we download it?

GATES: That's right. We go, just like the music, we go out to the computer and we pay the appropriate license fee, and then we bring down the material. And so let that...

KING: Why is this easier than just turning the pages of a book?

GATES: Well, it's less expensive to distribute the material. So if you have a book...

KING: I don't have to go to the store and buy the book.

GATES: That's right. And if it's a book that's not super-high volume book, today it doesn't work very well because you can't get out to the distribution...

KING: How many books in this?

GATES: This can hold about 500 books. So enough to keep you busy for quite some time.

KING: What do you think of Amazon, by the way?

GATES: Well, it's a fantastic success story. I'm certainly a good customer.

KING: You use them a lot?

GATES: Sure. I also use, you know, Barnes & Noble and some of the other sites as well, just so I can see who's staying up to date.

KING: And what is this little thing which looks to me like...

GATES: It's basically a...

KING: ... a phone.

GATES: It's a phone. That's absolutely right. And as soon as you get this color screen in here -- this one we've got our calendar, we've got our e-mail, if somebody sends us a piece of mail, we can just send back a voice mail just by pointing to it and hitting respond, and they'll immediately see in their inbox a little voice mail message.

So you won't have this world where faxes are one thing, e-mail is another thing, voice mail's another thing. Everything will come together, where, by using this screen, even if when you make a phone call, like if you call up for a movie schedule, it will all appear right there, or if you ask for directions to the restaurant, it will appear right there.

KING: But then things are going to be outmoded, right?

GATES: That's right. It's funny, when people talk about PCs changing, PCs have always changed. The things that are really going to surprise people is that the phone and the TV are going to change. We're in an era where the way you thought of the TV and the way you thought of the phone won't be the same at all.

KING: I think it's Loudeness, New Hampshire for Bill Gates -- hello.

CALLER: Hello, happy New Year to you.

KING: Go ahead.

CALLER: Hello, happy New Year.

KING: Same to you.

CALLER: Mr. Gates, in your opinion, what's the most important technological innovation of the 20th century?

GATES: Well, I think there's too that are pretty tough to choose from. The invention of chip technology, the ability to put all the transistors on to a single chip, that is such a fundamental breakthrough. It's led to the wonderful things we have today. Either that or the creation of vaccines, which, you know, have saved over time, you know, tens and tens of millions of lives. So I always have a tough time between, you know, information technology and medical technology.

KING: That little kid -- what is -- Paul Allen's not with the company now?

GATES: Well, Paul's on our board of directors, and I'd say he's really key personal advisor.

KING: But he's not an active day-to-day kind of guy?

GATES: Not a full-time employee, no.

KING: But you're still very close friends.

GATES: That's right.

KING: Are you still at times when you're with him like those two little kids back in 10th grade?

GATES: Yes, we can get each other pretty excited talking about the new ideas or laughing about how things can be predicted. You know, a lot of them have come true. Or laughing about, you know, how crazy it is to be, you know, to have the opportunity to have the positive impact that we've had. We have a lot of fun talking about that stuff.

KING: Do you ever think of buying a cereal company? Becoming a conglomerate, going out to other things? GATES: No.

KING: A cereal company?

GATES: No.

KING: An airline?

GATES: No, no, no. You know, the business we know, the thing that the people who come to work here every day have a passion for is building great software. And the frontier's there. If you compare the software we have today to what we'll have five years from now or 10 years from now, it's nothing. So this is it.

KING: OK.

Cheshire, England, hello.

CALLER: Hello, Mr. Gates. I am a small business owner in Cheshire, in England, and I use all Microsoft products because they suit me very well and they're industry standard. I've never felt pressure of any kind to stay with Microsoft, apart from that. Can you please explain to me what the government considers the offense your company is committing? Because I can't understand it.

KING: All right, that's a very good question. Can you briefly answer that? What did they say you did?

GATES: Well, they.

KING: Briefly.

GATES: It's hard to say honestly. You know, they look at our industry and they try to find someplace that it's not competitive.

KING: In a sense, they say you prevented competition, right?

GATES: Which is bizarre, because, you know, there's never been more competition. There's never been more start-up companies, there's never been more new jobs. So I am as confused as you are. Let's just put it that way. I have no idea, you know, why the company that's created so much competition is being harassed by it's own government.

KING: We'll be back with our remains moments with Bill Grates right after this.

(BEGIN VIDEO CLIP)

KING: What are you looking for in the next millennium?

DON RICKLES, COMEDIAN: I think we'll have a lot of Jewish people moving to Utah, Salt Lake.

KING: That's coming.

RICKLES: Oh, yes, big, big -- big congregation. KING: Jewish president?

RICKLES: No, don't push it.

JACK HANNA, COLUMBUS ZOO: My generation did more damage to the planet than any previous generation on Earth, and I just hope that the young people coming up today will take care of the wildlife and the resources a lot better than I did. I know that's great, isn't it?

KING: You believe in God. You believe you're going somewhere, right?

RICKLES: Yes, why? You heard something?

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: We're back with Bill Gates, the founder, chairman and CEO of Microsoft. So the drive never leaves you? You'll be here tomorrow morning working on something?

GATES: Well, the opportunity to build greater software is greater today than it's ever been.

KING: But what keeps you -- since you have all the money you'll ever need and the family will ever need, what personally drives you?

GATES: Well, I think every job is fun because what you do every day. I mean, it's wonderful that we have these horizons, we can make these positive impacts, but just sitting around and talking about how do we design this? What mistakes are our competitors making? How can we do this better? What do users want in all this? It's such a complex puzzle. And when we do -- when we put a product out there, people immediately tell us, you know, we love this part, we hate this part. You know, fix this up. We just shipped a product called Windows 2000, and we're just dying to hear from people. OK, what do they love and what do they want us to change? How should Windows 2001 be different?

KING: What do you worry about the most?

GATES: Well, I think that any company that's had a lot of success can...

KING: Topple?

GATES: ... find something complacent.

KING: Really?

GATES: Oh, like IBM did. You know, they didn't recognize some of the changes in the industry, and they went through a very tough period. Our business is a business where lots of companies have, you know, lost their way. So we have to make sure our vision, the excellence of the people, that that's being renewed year after year. And that's a huge challenge.

KING: Do you buy up other companies?

GATES: Actually, we do. In the course of the year, there's probably a dozen or so companies where we see that they've started down a path that they probably can't afford to take it the whole way. But if we put their people together with the resources we've got our smart people, we can do something that's quite amazing. So a product like Web TV is based on a group that we bought, and we brought our team together with theirs.

So every year you'll see about a dozen cases where we can accelerate our progress by bringing in other companies.

KING: And family, though, is still primary, right?

GATES: Well, for me, it's -- you know, that's the biggest thing in my life. It's the thing that overrides everything else.

KING: Thanks, Bill.

GATES: All right, super.

KING: Bill Gates, the founder, chairman and CEO of Microsoft.

Jeff Greenfield's been hosting panels as part of our hundred hours of coverage of the millennium. The next one's going to discuss humor, and it's very, very funny.

And we'll be back Monday night with Monica Lewinsky.

Thanks for joining us. From Microsoft itself in Redmond, Washington, I'm Larry King with Bill Gates. Have a great rest of the weekend. Have a great millennium.

Good night.

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