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- <text id=94TT0367>
- <title>
- Apr. 04, 1994: Is Bill Gates Getting Too Powerful?
- </title>
- <history>
- TIME--The Weekly Newsmagazine--1994
- Apr. 04, 1994 Deep Water
- </history>
- <article>
- <source>Time Magazine</source>
- <hdr>
- BUSINESS, Page 67
- Is Bill Gates Getting Too Powerful?
- </hdr>
- <body>
- <p>Microsoft's founder is branching out from software to global
- telecommunications systems
- </p>
- <p>By Janice Castro--Reported by David S. Jackson/San Francisco and Suneel Ratan/Washington
- </p>
- <p> Plenty of technology wizards lie awake nights anxiously wondering
- what Bill Gates is up to and how to grow up to be just like
- him. Microsoft (fiscal 1993 revenues: $3.75 billion), the company
- he heads, already owns the operating systems that run most of
- the world's personal computers. But good computers are not enough
- in the age of the information superhighway. As a result, many
- of Gates' new rivals on this front are monitoring reports of
- his latest ventures, wondering if Microsoft will invade their
- territory. Last week, in a stunning series of moves, the tousled,
- 38-year-old Harvard dropout treated them to a waking nightmare
- of activity:
- </p>
- <p>-- Teaming up with Craig McCaw, whose McCaw cellular-phone firm
- is the largest in the U.S., Gates unveiled plans for Teledesic,
- a $9 billion wireless global-communications network, linked
- by 840 new satellites, that would deliver interactive video
- and other data services beginning in the year 2001.
- </p>
- <p>-- While analysts were debating whether this global network was
- feasible, Microsoft announced a deal with Japan's Nippon Telegraph
- & Telephone, the world's second largest telephone company, to
- design business applications for CD-ROM and facsimile machines.
- </p>
- <p>-- Meanwhile, Gates visited Beijing, where Chinese President
- Jiang Zemin asked him to help China, one of the last great frontiers
- of the knowledge economy, develop its information industry.
- </p>
- <p>-- Gates closed out the week by announcing a $152 million deal
- with Mobile Telecommunication Technologies (Mtel), by far the
- largest paging firm in the U.S., to develop a nationwide wireless
- network for sending and receiving data from personal computers
- and other devices.
- </p>
- <p> What is Gates up to? The same thing most communication entrepreneurs
- are doing: looking for ways of shifting into the fast lane on
- the information highway as it is built--except that when Gates
- pulls alongside, others may be forced onto the shoulder. Within
- 10 years a handful of major firms are likely to dominate the
- three major areas of the digital world. One group will provide
- fiber-optic and satellite networks to carry entertainment, telephone
- service, video teleconferencing and other communications. Another
- will supply the programming. A third segment will furnish the
- software that controls the so-called magic box that consumers
- will use to access all these services.
- </p>
- <p> In anticipation of this era, software companies are teaming
- up fast. In the past few weeks, Novell, a network-software leader,
- has announced plans to buy WordPerfect, a top maker of word-processing
- software; Adobe and Aldus, both publishing software firms, are
- hooking up, as are Electronic Arts and Broderbund, makers of
- games and educational software. Such mergers, of course, are
- typical of the consolidation going on in the $7.3 billion computer-software
- industry, where companies are attempting to strengthen their
- competitive positions for the battles ahead. But even in this
- context, Gates' sweeping ambition stands out. "The leadership
- of Microsoft is the most aggressive in the industry," says Bill
- Bluestein of Forrester Research, which studies the computer
- industry. "They've been able to exploit their position as an
- operating-system provider and propel the company into all sorts
- of markets." Microsoft's tactics have often drawn fire from
- its competitors, who have accused the company of engaging in
- monopolistic schemes. The Justice Department is investigating
- Microsoft.
- </p>
- <p> Gates demonstrated the scope of his goals once more last week
- by taking on Motorola with his Teledesic proposal. Motorola
- has announced plans for its own satellite-linked worldwide system,
- through a new firm called Iridium. While Iridium is designed
- for portable devices such as phones and hand-held computers,
- Teledesic is intended for fixed locations, such as offices.
- Both ventures will compete with the U.S. phone companies, which
- are busily laying cable for a fiber-optic system costing at
- least $100 billion that will carry video signals and data as
- well as voice communications. Both systems will also require
- a large number of satellites.
- </p>
- <p> The launching of Teledesic left some critics wondering whether
- it is just another example of Gates' flexing Microsoft's muscle
- to lock out the competition, in this case by moving to control
- as large a share as possible of the limited supply of satellite
- slots when the FCC auctions them later this year. Those slots
- will only grow in value as the information highway is built.
- Certainly Gates is hedging his bets. Microsoft is working on
- development of the magic-box system. Its co-venture with Mtel
- will position it in new delivery technologies. Up until now,
- most people had assumed that Gates wanted to program the magic
- box. At this rate, he may own it.
- </p>
-
- </body>
- </article>
- </text>
-
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