December 8, 2023

Regrets, Resentment and Trivia in a Microsoft Partnership

At one time in his life, Mr. Allen writes, Mr. Gates liked to eat chicken with a spoon. He liked to save time by buying clothes that were easy to match. And at Harvard, Mr. Gates would nap at his terminal and then awaken to pick up precisely where he had left off, a “prodigious feat of concentration.”

As Mr. Allen highlights these and other traits about Mr. Gates, with whom he co-founded Microsoft in 1975 in one of the biggest partnerships in American business, some are trivial, like Mr. Gates’s choice of utensils at a dinner prepared by Mr. Allen’s girlfriend at the time, or that he read Fortune magazine “religiously” as a scruffy youth in enormous saddle shoes.

But in his book, “Idea Man,” to be published next month by Portfolio, a member of the Penguin Group (USA) Inc., Mr. Allen also hints at disappointment in the way he was treated by Mr. Gates during their ground-breaking partnership.

It is a portrayal shot through with occasions of Mr. Allen’s regret or resentment in their years of collaboration, which started when they were schoolboys in the late 1960s and Mr. Gates was a “gangly, freckle-faced eighth-grader edging his way into the crowd around the Teletype, all arms and legs and nervous energy.”

In excerpts from the book published in Vanity Fair, Mr. Allen suggests that Mr. Gates at times brushed aside or undermined their agreements and his position as a partner.

Mr. Allen eventually resigned in February 1983. But before that, after he had been diagnosed with Hodgkin’s lymphoma in 1982, Mr. Allen said he overheard Mr. Gates and Steven A. Ballmer, who was hired to run the business side of Microsoft, talking about Mr. Allen in Mr. Gates’s office.

“They were bemoaning my recent lack of production and discussing how they might dilute my Microsoft equity by issuing options to themselves and other shareholders,” Mr. Allen wrote. “It was clear that they’d been thinking about this for some time.”

While Mr. Allen said he confronted the two men, he wrote that Mr. Gates later tried to pressure him to sell his stock in the company with a “lowball offer” of $5 a share, which Mr. Allen declined.

Mr. Allen also wrote that Mr. Gates offered to hire Mr. Ballmer for 8.75 percent of the company, which Mr. Allen considered “a major breach of faith” because the offer was made while Mr. Allen was away and was more than the 5 percent Mr. Allen had agreed on.

Mr. Allen also said that Mr. Gates sought, and Mr. Allen agreed to, a greater share for himself in the early days of their business together, asking for a 60-40 share and then later a 64-36 split. But the recollection seems to suggest that Mr. Allen felt their partnership was uneven in many ways from the start.

“From the time we’d started together in Massachusetts, I’d assumed that our partnership would be a 50-50 proposition,” Mr. Allen wrote. “But Bill had another idea.”

Negotiations made him question the value of his own contribution, Mr. Allen wrote, and he might have “haggled” with Mr. Gates over the terms of their partnership agreement, “but my heart wasn’t in it.”

He said such discussions “exposed the differences between the son of a librarian and the son of a lawyer.”

Mr. Gates left full-time work at Microsoft in 2008 to devote more time to his philanthropic foundation.

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