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Bill Gates, Steve Jobs set for historic conversation


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SAN FRANCISCO (MarketWatch) -- For more than two decades, Apple Inc. Chief Executive Steve Jobs and Microsoft Corp. Chairman Bill Gates have sparred over the issues that were crucial to the development of the technology industry.


Issues such as whether it's wiser for a company to partner or build everything itself. Or the primacy of software versus hardware in personal computers. Or which is more important: how easy it is to use a product or what it can do once you figure out how?

This jousting over big ideas, sometimes friendly but often not, has always been from a distance.

Until now.


Although Gates made a famous phone call to Jobs in 1997 and the two briefly shared a stage at a 1983 Apple event, the two industry icons have never had a public conversation.


So when they sit down next Wednesday for a 75-minute joint interview in front of a gathering of tech executives, their long history and competing philosophies should make for an interesting -- if not history-making -- discussion.


"These two guys have always had different approaches -- like night and day," said longtime industry watcher Rob Enderle, principal analyst with the Enderle Group, a consulting firm.


The conversation at the fifth annual "D -- All Things Digital" conference in Carlsbad, Calif., comes as Gates and Jobs are headed in very different directions, and as the companies they co-founded both face big challenges.


Hanging with the 'Oracle of Omaha'


Gates, who long ago turned the Microsoft chief-executive chair over to Steve Ballmer, surrendered his role as chief software architect last June to focus on the Bill and Melinda Gates Foundation.


A big part of Gates' energy and formidable persuasive powers are now directed toward the charity and its goals of curing diseases in developing countries and improving education in the U.S. The world's wealthiest person, Gates last year roughly doubled the foundation's assets when he convinced fellow billionaire Warren Buffett to bequeath most of his fortune to it.

Earlier this year, Microsoft released what many analysts believe will be the last shrink-wrapped versions of its Office and Windows software -- the two franchises Gates created. These days, the company's biggest threat comes not from Apple but from Internet search leader Google Inc., which is providing business software over the Internet.


Last week, Microsoft agreed to pay $6 billion in cash for online ad firm aQuantive to boost its standing against Google. The acquisition, the largest in the company's history, shows that Microsoft is betting its future on something other than the PC market.


While the 51-year-old Gates is slated to become a part-time Microsoft employee next year, Jobs is as engaged as ever at Apple as CEO, product-design guru and public pitchman.


Jobs, 52, has used the iPod digital music player to change the way people buy and listen to music. Its massive popularity -- 100 million units sold, and counting -- has revitalized the company and sent its shares soaring over the past four years.

In February, he publicly berated big music publishers to do away with piracy-prevention technology, then promptly signed a deal with EMI to sell copyright-free digital songs.


Now, with many analysts wondering when iPod sales will slow, Jobs is readying the release of the iPhone, a combination cell phone and music player that will put Apple in direct competition with much larger rivals such as Nokia and Motorola.


Apple's success in the media-player market has been a late-career vindication of Jobs' philosophy that hardware- and software-product design be closely integrated from the start.


His insistence on that approach led to his ouster from Apple in 1985 and helped relegate the company to a single-digit share of the PC market. Meanwhile, Gates' strategy of focusing on software while partnering with machine makers propelled the Windows operating system to world domination.


By the late 1990s, with Apple struggling as a niche player while Microsoft's sales and share price were soaring thanks to Windows 95, the battle of ideas seemed to be over. Ironically, the showcase feature of the Microsoft operating system was an easy-to-use graphical interface similar to one Apple had rolled out years earlier.


Jobs' second act


Perhaps it was the bitter irony that inspired Jobs to try for a second act. After rejoining Apple in 1997 when it acquired his PC company, called Next, Jobs shocked the Apple faithful by cutting a wide-ranging deal with Gates, who invested $150 million in Apple and agreed to keep making software for the Macintosh.


The agreement, made public in a phone call that Gates placed to Jobs while the latter was on stage at an Apple event, made the cover of Time and Newsweek and helped rescue Apple from oblivion.


And the strategy that backfired on Jobs so badly in the PC market turned out to be precisely the right one in the market for digital music, at least so far.


Apple has grabbed a dominant share of the portable-music-player market in large part because the iPod device, its user interface and the software for the online iTunes music store work together seamlessly.


Microsoft, meanwhile, tried to replicate its PC success by focusing on media-player software and leaving the hardware development to its partners. But that approach captured only a meager share of the market for handheld players, and last year the company shifted gears and rolled out its own player, the Zune.


The move means that Microsoft is now competing with its former partners.


It's not only their competing philosophies that will make the Jobs-Gates interview one for the ages, but also the scope of their impact on consumer technology, according to Walt Mossberg, The Wall Street Journal technology columnist who along with fellow Journal columnist Kara Swisher is slated to interview the two on stage.


Much of the technology that consumers use every day, on the desktop and over the Internet, was derived in part from products developed by either Gates' or Jobs' company.


"Without the work they did on the PC, with hardware and software, we wouldn't have a lot of this stuff today," Mossberg said.

The "D" conference's lineup also includes on-stage interviews with "Star Wars" creator George Lucas, Google CEO Eric Schmidt, AOL founder Steve Case, Microsoft's Ballmer, Sen. John McCain, PalmPilot inventor Jeff Hawkins, Cisco Systems Inc. CEO John Chambers and others.


The conference is sponsored by The Wall Street Journal, which like MarketWatch is a unit of Dow Jones & Co.

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