Bill Gates

But man, if they did, that'd be crazy.

But man, if they did, that'd be crazy.

Yep. Okay, so at the end of all this, you might be wondering, why was search so important? How did Microsoft get so obsessed with the search engine? Why are they still running Bing today? Why has it been this sort of white whale for them where they continue to try over and over and over again to do search deals or acquisitions or things like that? Well, search monetizes incredibly well.

Yep. Okay, so at the end of all this, you might be wondering, why was search so important? How did Microsoft get so obsessed with the search engine? Why are they still running Bing today? Why has it been this sort of white whale for them where they continue to try over and over and over again to do search deals or acquisitions or things like that? Well, search monetizes incredibly well.

So Microsoft is sitting there realizing, okay, we're a technology company, right? Historically, what we've done is sell licenses of our software and people have paid us directly. But there's this new business model emerging that appears to just scale infinitely, where you can make three times or more off of each user, again, using software, but not selling the software to them.

So Microsoft is sitting there realizing, okay, we're a technology company, right? Historically, what we've done is sell licenses of our software and people have paid us directly. But there's this new business model emerging that appears to just scale infinitely, where you can make three times or more off of each user, again, using software, but not selling the software to them.

That's a much better business. If I could take 7 billion people in the world and sell them Windows, or I can take 7 billion people in the world and have them use my search engine for free and then make the money from the advertisers, I'm going to make 3 to 5x more money from the advertisers than I actually would selling them software.

That's a much better business. If I could take 7 billion people in the world and sell them Windows, or I can take 7 billion people in the world and have them use my search engine for free and then make the money from the advertisers, I'm going to make 3 to 5x more money from the advertisers than I actually would selling them software.

So suddenly this kind of becomes existential where the Windows revenue isn't going away, but actually the next generation of... Economics generated from software is not selling the licenses. It is monetizing via advertising.

So suddenly this kind of becomes existential where the Windows revenue isn't going away, but actually the next generation of... Economics generated from software is not selling the licenses. It is monetizing via advertising.

Yep. And the offline economy is much bigger than the software economy. And so everyone has to acquire customers, whether you make software or tents or airline tickets. And there's only a small set of dollars that goes to software. So if I just pull up my credit card statement each month, How much software am I paying for versus how much everything else am I paying for?

Yep. And the offline economy is much bigger than the software economy. And so everyone has to acquire customers, whether you make software or tents or airline tickets. And there's only a small set of dollars that goes to software. So if I just pull up my credit card statement each month, How much software am I paying for versus how much everything else am I paying for?

And even if you say, well, that's not really fair because it's advertising for everything else. It's not everything else directly. Even a small percentage of my everything else turns out to be way bigger than my software budget. So at the end of the day, Microsoft made a browser. They didn't monetize that browser. They monetized using it to defend an operating system. that they sold licenses to.

And even if you say, well, that's not really fair because it's advertising for everything else. It's not everything else directly. Even a small percentage of my everything else turns out to be way bigger than my software budget. So at the end of the day, Microsoft made a browser. They didn't monetize that browser. They monetized using it to defend an operating system. that they sold licenses to.

Eventually, Google comes along and creates a browser. They also don't sell that browser, but they monetize all the traffic coming through that browser, and they do it way better than Microsoft does at monetizing selling licenses. Maybe put it more simply, Microsoft built a browser, had a bunch of share, and then kind of looked around and said, we don't really know what to do with it.

Eventually, Google comes along and creates a browser. They also don't sell that browser, but they monetize all the traffic coming through that browser, and they do it way better than Microsoft does at monetizing selling licenses. Maybe put it more simply, Microsoft built a browser, had a bunch of share, and then kind of looked around and said, we don't really know what to do with it.

I guess we'll use it for defense. And Google built a browser and said, we know exactly what to do with this. And they used it for offense.

I guess we'll use it for defense. And Google built a browser and said, we know exactly what to do with this. And they used it for offense.

They do, David. Should we take a brief aside to talk about Microsoft's intertwined history with Facebook?

They do, David. Should we take a brief aside to talk about Microsoft's intertwined history with Facebook?