Paul Allen slams Gates in new memoir

Microsoft co-founder Paul Allen David McNew/Getty Images

Microsoft co-founder Paul Allen
David McNew/Getty Images
Revisionist history? A case of sour grapes? Or the unvarnished truth?

We'll have to wait for the answers until April 17 when it goes on sale but a new book written by Microsoft co-founder Paul Allen portrays -presumably now ex-buddy - Bill Gates as a not-so-nice guy who sought to chisel his rightful share of the company.

Allen, who left Microsoft relatively early in its history to battle cancer, went on to become a billionaire due to the appreciation of his stock ownership in the company after it went public. Allen recovered from his illness but most of his subsequent investments in the tech industry have had little impact. Under Gates - and his soon-to-be No. 2 Steve Ballmer - Microsoft went on to become one of the most successful companies in the world.

But the book, "Idea Man: A Memoir by the Co-founder of Microsoft," paints an unflattering portrayal of Gates and includes a few shots at Ballmer as well, according to excerpts which appear in Vanity Fair The Wall Street Journal, which had access to a draft of the memoir, reports that he book also rewrites the making-of-Microsoft narrative to give Allen a more central role in key decisions than participants in those meetings recall.

Some tidbits:

"From the time we'd started together in Massachusetts, I'd assumed that our partnership would be a 50-50 proposition. But Bill had another idea. "It's not right for you to get half," he said. "You had your salary at MITS while I did almost everything on BASIC without one back in Boston. I should get more. I think it should be 60-40."

At first I was taken aback. But as I pondered it, Bill's position didn't seem unreasonable. I'd been coding what I could in my spare time, and feeling guilty that I couldn't do more, but Bill had been instrumental in packing our software with "more features per byte of memory than any other BASIC we know," as I'd written for Computer Notes. All in all, I thought, a 60-40 split might be fair. ...

"We'd gone a block when he cut to the chase: "I've done most of the work on BASIC, and I gave up a lot to leave Harvard," he said. "I deserve more than 60 percent." "How much more?"

"I was thinking 64-36."

Again, I had that moment of surprise. But I'm a stubbornly logical person, and I tried to consider Bill's argument objectively. His intellectual horsepower had been critical to BASIC, and he would be central to our success moving forward--that much was obvious. But how to calculate the value of my Big Idea--the mating of a high-level language with a microprocessor--or my persistence in bringing Bill to see it? What were my development tools worth to the "property" of the partnership? Or my stewardship of our product line, or my day-to-day brainstorming with our programmers? I might have haggled and offered Bill two points instead of four, but my heart wasn't in it. So I agreed. At least now we can put this to bed, I thought. .....

Later, after our relationship changed, I wondered how Bill had arrived at the numbers he'd proposed that day. I tried to put myself in his shoes and reconstruct his thinking, and I concluded that it was just this simple: What's the most I can get? I think Bill knew that I would balk at a two-to-one split, and that 64 percent was as far as he could go. He might have argued that the numbers reflected our contributions, but they also exposed the differences between the son of a librarian and the son of a lawyer. I'd been taught that a deal was a deal and your word was your bond. Bill was more flexible; he felt free to renegotiate agreements until they were signed and sealed. There's a degree of elasticity in any business dealing, a range for what might seem fair, and Bill pushed within that range as hard and as far as he could. ....

...Aafter returning from my trip, I got a copy of Bill's letter to Steve. (Someone had apparently found it in the office's Datapoint word-processing system, and it made the rounds.) Programmers like Gordon Letwin were furious that Bill was giving a piece of the company to someone without a technical background. I was angry for another reason: Bill had offered Steve 8.75 percent of the company, considerably more than what I'd agreed to. It was bad enough that Bill had chosen to override me on a partnership issue we'd specifically discussed. It was worse that he'd waited till I was away to send the letter. I wrote him to set out what I had learned, and concluded, "As a result of discovering these facts I am no longer interested in employing Mr. Ballmer, and I consider the above points a major breach of faith on your part." Bill knew that he'd been caught and couldn't bluster his way out of it. Unable to meet my eyes, he said, "Look, we've got to have Steve. I'll make up the extra points from my share." I said O.K., and that's what he did. ...

One evening in late December 1982, I heard Bill and Steve speaking heatedly in Bill's office and paused outside to listen in. It was easy to get the gist of the conversation. 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. It was clear that they'd been thinking about this for some time. Unable to stand it any longer, I burst in on them and shouted, "This is unbelievable! It shows your true character, once and for all." I was speaking to both of them, but staring straight at Bill. Caught red-handed, they were struck dumb. Before they could respond, I turned on my heel and left.


The WSJ reports that the book has since created a rift between Gates and Allen.

  • Charles Cooper On Twitter»

    Charles Cooper is an executive editor at CNET News. He has covered technology and business for more than 25 years, working at CBSNews.com, the Associated Press, Computer & Software News, Computer Shopper, PC Week, and ZDNet. E-mail Charlie.

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