Microsoft

A tour of Bill Gates' mansion in Medina is going for a hefty price tag. The bid to tour his house (and have him guide you around) is up to $35,000. Last year, the tour sold for $8,600, the Seattle PI is reporting.

But before you run out to start bidding, it's only available to those who work at Microsoft as part of its annual charitable giving campaign. According to the Seattle PI, word slipped that the bidding was on the rise this year from Microsoft CIO Tony Scott at the Society for Information Management's SIMposium on Tuesday.

The Seattle PI is saying that employees can also bid to go on a run with CEO Steve Ballmer and the opportunity to buy the "World's Best Bologna Sandwich." But it's the tour of Gates' house that receives top billing every year. And for good reason--that thing is huge.

But all this talk of going on a tour of Bill Gates' house begs an important question: how much would you pay to talk a walk around Bill's house? Let us know in the comments below.

And just to start things off: $500. That's my limit.

It's been a year since Bill Gates left full-time work at Microsoft, but he's found plenty to keep him busy.

In between trying to eradicate polio, tame malaria, and fix the broken U.S. education system, Gates has managed to fulfill a dream of taking some classic physics lectures and making them available free over the Web. The lectures, done in 1964 by noted scientist (and Manhattan Project collaborator) Richard Feynman, take notions such as gravity and explains how they work and the broad implications they have in understanding the ways of the universe.

Gates first saw the series of lectures 20 years ago on vacation and dreamed of being able to make them broadly available. After spending years tracking down the rights--and spending some of his personal fortune--Gates has done just that. Tapping his colleagues in Redmond to create interactive software to accompany the videos, Gates is making the collection available free from the Microsoft Research Web site.

Gates said that he hoped his action would serve as a model for taking great educational content and making it broadly available for free.

"When a lecture is presented as well as this, it draws more people in to understanding science." Gates told CNET News. "And over time I hope there's more like this."

In a wide-ranging interview, Gates also reflected on the changes at Microsoft, spill the beans on the expansive vision for Product Natal and shared his thoughts on Google's just-introduced Chrome OS. Here's an edited transcript of that interview.

You first saw these videos on a vacation 20 years ago. Do you want to talk a little bit about how that happened, and what your reaction was to seeing those lectures?
Gates: Yes. I was in a period where, in order to learn new science, thought it would be a fun thing to see what films there were, and we went to some university catalogs, including University of California system had a catalog of films, and got a lot of health, biology, physics type films--those are those metal cans with big reels--and then we had a projector in a room that we made dark. So even (during) the day, you could thread these films. And there were a lot of interesting ones, but these Feynman lectures that he gave at Cornell...those were just unbelievably good.

After that, I got them put onto videotape, and I got rights to make a small number of videotapes. It was VHS tape at the time, and send it around to some friends who might be interested. But I always had in the back of my mind that it was kind of a crime that there wasn't broad availability of those things, particularly for young people thinking about science.

And so I sort of had this project in mind, and (have been) making some progress in understanding who had the rights, and eventually doing deals for the rights, and then getting these things scanned, and then getting Microsoft Research agreed to host the stuff and create some innovative software around it, which Curtis (Wong) has run. It's taken a long time, but with lots of PCs and the Internet, and my willingness to spend some money, now these things are just going to be out there.

What do you hope people get out of these videos? Who is your ideal audience for them?
Gates: Well, I didn't get to see these until I was about 30, and so I would love it if lots of young people saw them, and got a sense of the fun, and how science works, and what's complicated, and what's not. I hope some people who teach science are inspired by the way that Feynman managed to make it interesting without giving up the depth of how it works.

With super-high-quality material like this up there for free, I hope people see the potential, and that they'd benefit from this one in particular, and then it starts to push forward the idea if someone is great lecturer, then their work should be out there and available.

I've heard you talk about the way community college really should change, and really what we should be doing for some of these subjects that are somewhat universal is taking really the best explanations, the best lectures out there, and making those broadly available, and then focusing sort of the local learning around discussion and different sorts of things.
Gates: That's right. Education, particularly if you've got motivated students, the idea of specializing in the brilliant lecture and text being done in a very high-quality way, and shared by everyone, and then the sort of lab and discussion piece that's a different thing that you pick people who are very good at that.

Technology brings more to the lecture availability, in terms of sharing best practices and letting somebody have more resources to do amazing lectures. So, you'd hope that some schools would be open minded to this fitting in, and making them more effective.

But, you've also got this huge set of people who like to teach themselves and like to learn things, and yet find science kind of daunting. And when a lecture is presented as well as this, it draws more people in to understanding science. And over time I hope there's more like this, including some about science stuff that's changed since the time these were done.

How big an impact do you think these types of things can have in terms of the overall problem of getting people interested in math and science? Is this type of thing enough, or do we really need to fundamentally do more, younger?
Gates: Well, certainly in fifth grade through senior year, most students aren't yet motivated to want to learn a lot in general, and particularly about science and math. The big impact is anything that can help teachers do a better job, where teachers can either see other teachers doing it super-well, or they might incorporate some online things into the classroom experience. As you get older, and you've got people who are motivated more clearly, then it shifts where these online lectures can be a huge part of learning.

That's where Feynman with his clarity of explanation and simplicity of explanation, and love of the subject, and humor around it is such an exemplar.

You mentioned that you didn't get to see these until you were in your 30s. If you had seen them earlier in your career, maybe before you decided to start Microsoft, do you think you might have headed in a different direction?
Gates: I'm not sure. I've always liked physics, but I also want the equivalent lectures to be out there for biology, and computer science, and chemistry. Everybody has a level where you can bring in their interest. I mean, people care about animals, and disease, and food, but many of the sciences are so abstract, and the amount of things you have to learn before you start connecting to those practical issues can be very daunting. And yet with a teacher like Feynman they're out there in different fields, it's just that we haven't had a way to magnify their excellence, and make it broadly available.

One of the points that's made in the lectures is this idea that from the discovery of gravity there's basically been since then 400 years of just an avalanche of discoveries, and he sort of puts forth this notion of continuous progress. And I'm curious, do you see that having continued, or have we seen limits to sort of some of the full understanding that the basic sciences can give us? Are there things that are beyond sort of what basic science can teach us?
Gates: We're learning more about basic science today by a huge amount than ever before. You just take understanding materials, why they break, why they're strong, how you engineer them to have various properties, and a lot of that was black magic. And it's only now that we're able to say, okay, when we want to make batteries that charge really fast, okay, how do you make something with a lot of surface area that doesn't degrade.

Anyway, in material science, or basic medical things, or basic things about physics that are going to be important for cheap energy as just one example, this is the most interesting time. That's why it's partly an irony that you're not getting the best and the brightest particularly native born to go into science and math. And so you've got to look back and say, what is it we're doing about making it daunting, or abstract that holds that back so much.

There's an American physicist, Fritjof Capra, (who) wrote a lot of books in the '70s on ecology, and the limits of Cartesian thinking. Basically his thing was that by focusing on sort of the Cartesian reductionist approach to things that prioritizes sort of looking at the small parts--that type of thinking has contributed to not getting as deep an understanding of things like ecology, and really complex systems. Is that what's caused us to get into some of the problems we have, or do you think it's more just these are tough choices and require conserving, and things that are kind of hard for us as humans to do?
Gates: Well, the tough situation that we're in is that we have electricity, we have medicines, we have vaccines, those were all due to scientific understanding. And as we get new materials, new batteries, solar, nuclear energy that don't cause environmental things, it will be because of these scientific understandings. So, I think the incredible improvement in living standards, and life expectancy, and literacy, and all those things really do come back to the advanced scientific understanding. And when people look at history, that's the one thing that they always undervalue is how scientific progress has allowed us to do those big things.

It's true that as you go forward, you tackle more complex problems, but the tools of modeling and simulation and getting a lot of people who are mainly in politics, but know enough about science to be in the discussion, that's important. You know, there was a book written called Physics for Future Presidents, which took some of the basic notions of energy density and costs and dangers about radiation or nuclear weapons, and put that into a fairly straightforward thing.

We do have a problem if we don't draw a large part of society into at least some understanding of science and the tools of science. And so, having great lectures online, I have several goals--improve education, get more people into the sciences in a deep way, but also get a broader set of people into sciences in even a modest way.

When we talked a year ago, I asked kind of what you anticipated your life would be like once you stopped being at Microsoft full time. Now a year later what are some of your observations on how your time is different, and maybe what are some things that you hadn't expected about where you are today?
Gates: Well, the foundation work is very rewarding, and there's a lot of interesting complexity that comes with it. I'm pretty much doing what I expected to be doing, which is very different than what I was doing before my job changed. I do have about 20 percent involvement with Microsoft, where topics like their future of Office, of search, or various things that Steve (Ballmer) asked me to look into and help out with come along. So that's developed pretty much like I would expect.

It will be interesting as I get a year or two more out, and I know the activities and the people (at Microsoft) a little bit less, you know, how Steve and I make sure I stay fresh and connected and things like that. So, maybe the first year was always going to be the easiest. And it's at the level that we planned it for, which is giving me a massive amount of additional time to meet with scientists and go to the developing world and meet with various government partners.

For the last three months, up until two weeks ago, I was entirely in Europe, and actually based out of there. Our family had moved over there. So, I was up at Cambridge and Oxford. For that period I was particularly focused on the science and partners, both governments and companies, and things that happen to be based in Europe. That's done, but the kind of things I was doing there are exactly what my schedule looks like over the next six months, where I'm in India, I'm in Africa, going to meet with companies, doing things, meeting with scientists. So, you know, I'm thrilled by the foundation work, and fortunately I have Jeff Raikes running the foundation as CEO, and so my role at the foundation is a lot like it was in the period where Steve had already taken over as CEO, where I got to be more on the research side, the breakthroughs, the new ideas.

And you've been doing some stuff with Intellectual Ventures. I know every time you show up on a patent application that, folks get interested in what you're looking at, whether it's stopping hurricanes, or beer kegs, or what-have-you.
Gates: That's right. We're going to make the cows that don't fart. You name it, we've got it under control.

That's been really exciting to take this idea of gathering top scientists from a broad set of areas and think about problems that can be solved. And in the case of the foundation, you know, Nathan (Myhrvold) has used that ability to convene great scientists to look at things like how do you deliver vaccines without having to use as many refrigerators, or how do you pasteurize milk in a better way, some very interesting things. And then I also sit down with that group when they're looking at their rich world applications, including things around energy, and one of those has actually led to creating a company called TerraPower, which is focused on a new, very radically improved nuclear power plant design, which is a hard thing to get done, but extremely valuable if it comes through.

I'm curious of your thoughts of how Microsoft is doing as a company since you left. I'd also be remiss if I didn't ask you what you thought of Google's efforts to get in the OS arena.
Gates: Well, just to do the second part very succinctly, there's many, many forms of Linux operating systems out there, and packaged in different ways, and booted in different ways. So I don't know anything in particular about what Google is doing. But, in some ways I'm surprised people are acting like there's something new. I mean, you've got Android running on Netbooks; it's got a browser in it. In any case, you should make them be concrete about what they're doing. It is kind of a typical thing. When Google is doing anything it gets this--the more vague they are, the more interesting it is.

I guess there is the notion, though, and I know Microsoft Research had been looking at it, too, of whether the browser, because it's become so central to so much of our work, needs to take on more operating system-like characteristics.
Gates: It just shows the word browser has become a truly meaningless word. Anyway, what's a browser, what's not a browser? If you're playing a movie, is that a browser or not a browser? If you're doing annotations is that a browser or not a browser? If you're editing text, is that a browser or not a browser? In large part it's more an abuse of terminology than a real change.

What about on the question of how Microsoft is doing?
Gates: I'm always the one who thinks, gosh, why isn't Microsoft doing even more, because that's been my mindset, let's move fast, do new things very quickly. But, you have to say, whether it's Windows 7 that is a really excellent piece of work. I'd go so far as to say both compared to other operating systems, and compared to other generations of Windows, it's an extremely nice piece of work.

What they're doing in new versions of Office--I guess they showed a little bit of how the Web piece fits into it recently, but there's a lot about the new version that will get talked about in the next nine months or so. The work on search, where people see Bing as a nice piece of work, really see us in the game, hiring really top people, and willing to try to do things some different ways.

The part of Microsoft I stay up to date the most on is probably the research group. I was over at the Cambridge lab a few weeks ago, over at the India lab as part of a trip I take this month, and that's really the sort of crown jewel in terms of always feeding neat new things into Microsoft. I'd say a cool example of that, that you'll see is kind of stunning, in a little over a year, is this (depth-sensing) camera thing... Not just for games, but for media consumption as a whole... If they connect it up to Windows PCs for interacting in terms of meetings, and collaboration, and communication, you put the camera in now it's a cool thing, and it's just an example where Microsoft research did the original stuff to show, with the depth information, something great could be done. Then both the Xbox guys and the Windows guys latched onto that and now even since they latched onto it the idea of how it can be used in the office is getting much more concrete, and is pretty exciting.

So Microsoft is a very innovative company, but obviously in a hyper-competitive field, which is what makes it such a great field.

I'm not sure I understood that last point. You're talking about cameras, you were talking about like the depth sensing cameras that are in Natal?
Gates: Yes, exactly, Natal. The software libraries and applications we're doing around Natal.

And we'll basically see that in more than gaming? We'll see it in other scenarios, too?
Gates: Well, I think the value is as great for if you're in the home, as you want to manage your movies, music, home system type stuff, it's very cool there. And I think there's incredible value as we use that in the office connected to a Windows PC. So Microsoft research and the product groups have a lot going on there, because you can use the cost reduction that will take place over the years to say, "Why shouldn't that be in most office environments?"

Microsoft doesn't just want to bring gesture recognition to the Xbox with Project Natal. It also wants the technology in Windows, according to a very good source--Microsoft Chairman Bill Gates.

In an interview with CNET News this week, Gates talked about a world in which depth-sensing cameras such as the one allow people to control their PCs, game devices, and televisions. (See a video from the E3 conference below.)

Speaking about all of the technology Microsoft has cooking in its labs, Gates said: "I'd say a cool example of that, that you'll see... in a little over a year, is this (depth) camera thing." Gates said it was not just for games, "but for media consumption as a whole, and even if they connect it up to Windows PCs for interacting in terms of meetings, and collaboration, and communication."

Gates said it is an example where the project started in Microsoft research but is now being commercialized by both the Xbox and Windows units. "Both the Xbox guys and the Windows guys latched onto that and now even since they latched onto it the idea of how it can be used in the office is getting much more concrete, and is pretty exciting."

Using your body to control devices makes a lot of sense, Gates said. "I think the value is as great for if you're in the home, as you want to manage your movies, music, home system type stuff, it's very cool there," he said. "And I think there's incredible value as we use that in the office connected to a Windows PC. So Microsoft research and the product groups have a lot going on there, because you can use the cost reduction that will take place over the years to say, why shouldn't that be in most office environments."

Gates actually dropped the first hint of Natal during his joint appearance with Steve Jobs at the D: All Things Digital conference in 2007

"Imagine a game machine where you're just going to pick up the bat and swing it, or the tennis racket and swing it," Gates said.

Moderators Walt Mossberg and Kara Swisher mocked Gates, saying such a technology already exists and it's called the Wii. But Gates disagreed. "No, that's not it. You can't pick up your tennis racket."

He later added, "You can't sit there with your friends and do those natural things," he said. "That's a 3D positional device. This is video recognition. This is a camera seeing what's going on."

To Bill Gates, Google's Chrome OS looks a lot like a familiar foe: Linux.

"There's many, many forms of Linux operating systems out there and packaged in different ways and booted in different ways," Gates said in an interview with CNET News this week. "In some ways I am surprised people are acting like there's something new. I mean, you've got Android running on Netbooks. It's got a browser in it."

Gates said it was hard to really say much about Chrome OS, since Google has said so little about how it will actually work.

"The more vague they are, the more interesting it is," he said.

As for the notion that the browser needs to act more like an OS, he noted that the browser has already become an extremely broad concept, with all of the plug-ins and other things that are now done inside a browser.

"It just shows the word browser has become a truly meaningless word," Gates said. "What's a browser? What's not a browser? If you're playing a movie, is that a browser or not a browser? If you're doing annotations, is that a browser? If you're editing text, is that a browser or not a browser? In large part, it's more an abuse of terminology than a real change."

Meanwhile, CEO Steve Ballmer suggested on Tuesday that Windows, rather than a browser-centric OS was the right approach. To bolster his argument, Ballmer noted that half of PC use today is spent doing work outside the browser.

"We don't need a new operating system," Ballmer said Tuesday, as part of his keynote at Microsoft's Worldwide Partner Conference in New Orleans. "What we do need to do is to continue to evolve Windows, Windows Applications, IE (Internet Explorer), the way IE works in totality with Windows and how we build applications like Office...and we need to make sure we can bring our customers and partners with us."

Ballmer and Gates also stressed the fact that Google now has two operating systems--Chrome OS and Android. Ballmer noted that Microsoft learned with the separate Windows 95 for consumers and Windows NT for businesses that having two operating systems isn't necessarily a positive thing.

"The last time I checked you don't need two client operating systems," he said. "It's good to have one."

Ballmer and Gates also echoed the note Business Division President Stephen Elop sounded in an interview with CNET News last week--that Microsoft really doesn't know what Chrome OS will look like.

"Who knows what this thing is?" Ballmer said.

Microsoft Chairman Bill Gates and Chief Executive Steve Ballmer are optimistic about the power of tech to recover from the current recession and bring business along with it, according to speeches they made at Microsoft's 13th annual CEO Summit earlier this week.

Although the event was private, Microsoft released four clips of the keynote speeches made Tuesday by Gates and Ballmer, which strike a positive tone about the future.

Bill Gates

(Credit: Microsoft)

In his keynote speech at the summit, Gates said that overall he was very optimistic about the economy with the opportunities for innovation stronger today than ever. "The drug companies will get back in high productivity mode," he said. "The software, IT revolution--we're just at the start of that. What we can do for education, communication, and what that looks like for the efficiencies of world markets, we are just at the beginning of that."

In his speech, CEO Ballmer also hit an upbeat note, saying "As we think about the future of information, and how it embraces the PC, the phone, the TV...I have nothing but optimism about where things are going."

Steve Ballmer

(Credit: Microsoft)

Ballmer expressed faith in the power of the Internet to drive business, saying, "Some people probably think the Internet revolution is in the second half of the game. But I tell you, we are coming into halftime. The degree of change that'll continue to come as essentially businesses and IT departments embrace the Internet, it's unbelievable."

Ballmer also believes a continued focus on research spending is vital, adding, "The innovation's going to proceed as rapidly. And people say, no, it can't be. Capital's going to be taken away. I don't know anyone in our industry who's cutting their R&D budget."

The 2009 CEO Summit was attended by more than 100 top business leaders, including News Corp. CEO Rupert Murdoch, Amazon.com CEO Jeff Bezos, and Berkshire Hathaway's Warren Buffett. This year's summit offered discussion topics related to the stormy economy, including "Managing Through the Recession" and "Speed, Scale and Smarts: Strategies for Multinationals in Turbulent Times."

Like most tech firms, Microsoft has been buffeted by the global recession. Last month, it reported a drop in sales and earnings for its fiscal third quarter. To cut costs, the company has already laid off employees as part of its move to trim 5,000 jobs worldwide. Microsoft is hoping for a brighter future with an arsenal of new products hitting the market over the next year, including Windows 7, Windows Server 2008 R2, Office 2010, and Microsoft Exchange 2010.

This story was update at 1:59 p.m. PST, with information about a potential tax break for Allen regarding the Charter bankruptcy.

For Microsoft co-founder Paul Allen, 2009 is not starting well.

Paul Allen, who owns the Portland Trail Blazers, among many other assets.

(Credit: NBA)

His largest investment, Charter Communications, announced last week it would file for Chapter 11 bankruptcy, pushing the value of his multibillion dollar investment down to a little more than $11.5 million, based on Wednesday's closing stock price of a little less than 3 cents per share.

Last month, Allen cut the workforce at his private investment and philanthropic company Vulcan by 7.6 percent, or 50 positions, according to a report on the Puget Sound Business Journal's TechFlash.

Meanwhile, Allen has seen his 2008 ranking on Forbes' list of global billionaires, fall to No. 41, as his estimated net worth dropped to $16 billion. In 2007, he was No. 19, with an estimated worth of $18 billion.

Allen's investment portfolio is a surprising mix of tech industry disappointments and successes in other areas, such as media and even oil. Since 2004, when Allen hired Lance Conn to oversee Vulcan's investment arm Vulcan Capital, Conn has pushed Allen's investments beyond its core theme of creating a wired world, which was based on creating a global broadband connection to link computers, televisions, and other devices together. Allen's investments now include companies ranging from the crude oil business to education and finance.

That's a good thing for Vulcan, because the wired-world strategy has never worked as well as many would have imagined for the 23-year-old investment company. Charter will bring the Microsoft co-founder $175 million in cash as part of the restructuring agreement reached with the debt holders. Vulcan also gets up to an additional $20 million in management fees, becomes the holder of $85 million in new debt for the cable operator, and gets a 3 percent stake in the Charter holding company, once the agreement goes into effect April 1.

Charter Communication's stock price (in dollars) over the past five days.

(Credit: Yahoo Finance)

And Allen may also stand to receive a potential tax-break windfall, to the tune of $1 billion, if he qualifies for a provision in the recently-approved stimulus package, according to a report in The Wall Street Journal

The report noted:

Since Mr. Allen's stake in Charter is around 50 percent, his partnership share of the debt forgiveness could be as much as $4 billion. Assuming an effective tax rate of 25 percent, the new law could spare Mr. Allen the necessity of paying as much as $1 billion in taxes...at least until 2014.

Representatives from Vulcan were not immediately available for comment.

In fairness, some of Allen's media investments (even the online ones) have done well. Take, for example, his investment in the DreamWorks SKG entertainment company: Starting in 2004, Allen invested $700 million and took out a total of $1.5 billion prior to ending his relationship with the company last year, said one source. That more than doubled his money. The Nasdaq, in comparison, was up 24 percent during the same time period.

Vulcan also invested $300 million into the online women's network Oxygen Media, beginning in 1998. Allen pulled out about $450 million, or a 50 percent return, in the fall of 2007, after the company was sold to NBC Universal, added the source.

Allen is also an investor in Plains All American Pipeline, a company in the crude oil business. Since Vulcan made its investment stake in April 2004, when the stock was trading around $24 a share, the company's stock has largely risen, climbing as high as the mid-$60s in the summer of 2007, before retreating to end the day at $39 a share on Wednesday. Vulcan invested $200 million into Plains All American.

Vulcan has other sizable investments in non-wired world investments, such as a $1.5 billion investment in Makena Capital Management, in which Vulcan now holds a 10 percent stake, as well as investments that far exceed $100 million in Silvercrest Asset Management Group and Laureate Education, a for-profit education company, noted the source.

But many of Allen's other technology investments seem to have more mixed prospects, which is noteworthy for one of the pioneers of the high-tech industry:

• ZoomInfo, a search engine company formerly called Eliyon Technologies, received a $7 million funding round in 2004 from Vulcan and other investors. The privately held company, founded in 2000, says it's been cash-flow positive since 2003 and that its 2007 revenues grew 32 percent to more than $16 million. But it has yet to provide a payday for its investors with either an IPO or sale .

But Vulcan is unlikely to be writing off this investment quite yet. Another source familiar with Vulcan's investments said the company is known to take a five- to seven-year outlook on its investments in private companies.

• Infinia Networks is a solar energy company that in 2007 received a $9.5 million investment from Vulcan and a group of other investors. The following year, the company landed an additional $57 million second round of funding, with Vulcan participating.

Although Vulcan and the investors did well on the second round, with Infinia receiving a valuation that was eight times higher than the valuation assigned in the first round, solar-energy companies are a tough sell on Wall Street. GT Solar, a solar equipment maker, launched its IPO in July at $16.50 a share, falling 12 percent on its first day of trading. The stock closed at $4.61 a share Wednesday and it, along with other solar companies like SunPower, JA Solar Holdings, and Trina Solar, have underperformed the broader markets since October.

• Vulcan invested twice in Radar Networks, which in October launched Twine, a Web application that relies on so-called semantic Web technologies to automatically bookmark and organize a user's Web content.

Vulcan led a $5 million first round in Radar Networks in spring 2006 and followed that up with participation in a $13 million second round in February 2008. It's unclear how well it's doing so far, but it faces an uphill battle in the sour economy.

• In 2006, Vulcan Capital led an $8 million second round of funding in online residential real estate brokerage company Redfin. Vulcan followed that up a year later, participating in a $12 million third round with other investors. Since then, of course, the real estate market has tanked. While Vulcan was able to receive a higher valuation for Redfin on its second investment, it has yet to be seen whether it will be as fortunate in any subsequent funding rounds in the current climate.

From there, the track record on Vulcan tech investments gets a little uglier. According to a report on VentureBeat, Vulcan was among the investors that infused baby products retailer BabyStyle with more than $146 million before it filed for bankruptcy last year. Allen, however, fortunately unloaded the investment in 2003 to a private investor, a source familiar with Vulcan Capital said.

In May 2004, Vulcan investment RCN filed for Chapter 11 bankruptcy protection, according to a report on Bloomberg. Vulcan invested $1.65 billion in the company in early 2000.

Also added to the mix is wireless Internet service provider in 2001.

For Allen, the Charter Communications, RCN, and Metricom bankruptcy filings speak volumes regarding his wired world strategy, one which he may increasingly want to disconnect.

"The underlying demographic trends that the wired world was based on have born out, like the growth of the Internet," said Paul Latta, an analyst with McAdams Wright Ragen. "But that doesn't necessarily make the stock price go up."

Steven Levy writes about Microsoft Chief Software Architect Ray Ozzie in the latest issue of Wired. The nearly 7,000-word profile doesn't offer many new revelations about the software-plus-services or cloud-computing efforts that Ozzie is leading at Microsoft, but it provides a vivid portrait of Ozzie's path from the University of Illinois in 1973 to taking over Bill Gates' software czar responsibilities in 2005.

Ray Ozzie has been on a software journey since his college days at the University of Illinois to fulfill a dream of connectivity.

(Credit: Wired, CNET )

Following is an excerpt from Levy's profile characterizing the Gates-Ozzie relationship:

Ozzie left IBM and founded a startup called Groove Networks, which made collaborative software. Released in 2001, the Groove app was terrific technology, with peer-to-peer transmission and superstrong crypto built in. But the postbubble timing was awful, and Ozzie realized that the company couldn't make it on its own.

The obvious move was to sell to Microsoft, which had already invested some $50 million in Groove. For Gates and CEO Steve Ballmer, however, getting the technology was just a bonus; the real treasure was its founder. Gates had once described Ozzie as "one of the top five programmers in the universe." Former Groove employees still talk about the time Gates visited and the two leaders got off on a tangent about some arcane technical point. As they bounced improvisations off each other, Ozzie coming up with ideas and Gates rocking back and forth with excitement, it was like watching some propellerhead version of a John Coltrane-Miles Davis performance. Ozzie wouldn't be just a great hire--he would be the hire, the one person qualified to be a partner to Gates and Ballmer in revivifying Microsoft.

In the profile, Ozzie addresses the standard rap on Microsoft -- that it wants to re-create its Windows dominance in the cloud through the use of proprietary standards:

Eric Schmidt, CEO of that G-word company, says that because Microsoft has so much market share in servers and operating systems, the Redmondites will certainly be big players in cloud computing. He sees it as an extension of Microsoft's nasty behavior in the '90s. "Microsoft's basic strategy is to gain enough share in cloud computing to force other people to use its standards," he says. (By contrast, Google has blessed an open source version of its cloud technology, which both IBM and Yahoo have adopted.) Ozzie doesn't buy the charge. "Google and Microsoft have the same basic philosophy. We're basing our cloud on Windows technologies because they're great technologies and we have a lot of higher-level services on them. If you want to write open source stuff on them, you can do that."

One of Ozzie's major challenges to is create a more open and flexible Microsoft, a company that can compete on a more level playing field.

Mitch Kapor, the former head of Lotus Software, where Ozzie's team created Notes, sums up Ozzie's lifelong quest:

To Ozzie, software's soul does not lie in the accumulation of features. Instead, it lies in his dream of connectivity. "Live Mesh is very Ray," Mitch Kapor says. "It's the son of Groove, which is the son of Notes." Which was, of course, the son of Ozzie's beloved Plato. Thirty-three years later, Ozzie is still trying to build on what he saw in sophomore year. But it's no longer the Ray Ozzie vision. It's Microsoft's.

Former Seattle Post-Intelligencer reporter Todd Bishop launched his new Web site on Wednesday with an interesting post on what Bill Gates is up to.

BGC3's logo, as filed with the Trademark Office.

The software icon and philanthropist is affiliated with something called BGC3, essentially the name given to Gates' non-Microsoft, non-foundation office. Bishop's source says it's not a commercial venture, while the company's trademark application covers "think tank services."

The company applied for a trademark on the BGC3 name and a C3 logo on September 29. Just what the company plans to do with that trademark remains to be seen.

Gates told CNET News as he was retiring from full-time Microsoft work in June that he planned to open a separate office, though at the time, he didn't detail plans for a new company.

The BGC3 report marks a good start for Bishop, whose TechFlash site officially launched Wednesday. Bishop and John Cook both left the Seattle P-I last month to set up the new site, which is backed by the Puget Sound Business Journal.

SANTA CLARA, Calif.-- Microsoft's Bill Gates and Steve Ballmer were both making speeches Thursday, but to widely different audiences.

Gates, the company's chairman who has stepped away from full-time Microsoft work, was at the United Nations to discuss global progress in the fight against poverty, while chief executive Ballmer is here to address the Churchill Club, a collection of Silicon Valley entrepreneurs and executives.

Gates was before the UN wearing his hat as head of the Bill and Melinda Gates Foundation and to speak on where the world stands versus the Millenium Development Goals. Although the metrics show the world ahead in some areas and trailing in others, Gates told the assembly of world leaders that the important thing is that there are now measurable goals for fighting poverty.

"I love the Millennium Development Goals," he said, according to remarks posted on the Gates Foundation Web site. "I think they are the best idea for focusing the world on fighting global poverty that I've ever seen...Thanks to these goals, not only UN agencies but the world at large knows the key measures of poverty, hunger, health, and education. Some of the numbers are good and some are not. But the fact that the world is focusing on the numbers is excellent."

As for Ballmer, he is speaking on stage in a conversation with Silicon Valley venture capitalist Ann Winblad. That talk starts in about an hour, so check back to CNET News and Beyond Binary for coverage then.