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Originally published June 28, 2008 at 12:00 AM | Page modified June 28, 2008 at 11:21 PM

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Microsoft says goodbye to Bill Gates

For all the superlatives used to describe Microsoft's rise and stature over the years, at its heart are two guys who never would have guessed how big the company and the industry have become.

Seattle Times technology reporter

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For all the superlatives used to describe Microsoft's rise and stature over the years, at its heart are two guys who never would have guessed how big the company and the industry have become.

That sentiment came out as Microsoft said goodbye Friday to Bill Gates, who co-founded the company 33 years ago and now turns his full-time attention to philanthropy.

Gates made an exception to his usual distaste for self-congratulation, spending more than an hour in an open, emotional reminiscence with his friend, business partner and successor, Steve Ballmer.

"My life's work really is about software and working with incredible people," Gates said with tears in his eyes at a gathering on the company's Redmond campus. "And I love working with smart people. I love working with Steve. I love working with all the incredible people here."

Earlier in the week, Gates learned that the company's software-development-tools business had passed $1 billion in sales for the year.

"I remember Steve and I staying up late at night wondering if any software company, whether it was Microsoft or anyone, could ever get to a billion in sales," Gates said. "That is a big number."

In the fiscal year that ends Monday, Microsoft is expected to have total sales of more than $60 billion.

Microsoft has its origins in the big dreams of Gates and Paul Allen, who discovered computing together at Lakeside School in North Seattle. They imagined a time when computers would be affordable and software would do amazing things. Gates said the dream "seemed very crazy" at the time.

"I dropped out of school, we got the company going and people thought we were kind of strange guys," he said. "... We've come an amazing distance."

A defining triumph was the company's battle with the dominant company of the day, IBM. Gates called it a David vs. Goliath story that "came out with the right ending."

In other areas, Gates acknowledged the company made mistakes and has been late to appreciate some trends in technology. "But we've come back and we learn from those things, and a lot of our best work is the result of that," he said.

The areas where Microsoft is the biggest underdog today are Internet search and advertising. Gates said Microsoft is applying its time-tested formula of putting together teams of smart people, studying the competition, conducting research of its own and coming out with a better product.

"Even though it takes years before people see the full effect of that, it's an exciting thing," he said. "We have so many opportunities to surprise people."

Ballmer said it's more fun to come from behind in business.

"It's actually harder, and a lot of people who work for the company now have never done it," he said.

The two men shared a small stage in an auditorium on Microsoft's headquarters campus, which now sprawls on both sides of Highway 520 — a physical representation of the company's dramatic growth.

Gates recalled nearly 30 years ago when he was trying to attract Ballmer to the company, which only had about 30 employees at the time.

"I'd hired my friends, which was a small set, and that wasn't going to get us there," Gates said.

Gates and Ballmer discussed the need to grow the staff. They could imagine doubling, from 100 to 200, or 200 to 400. "But we always thought that would be it," Gates said.

In pursuing the company's dream of a computer on every desk, they were more preoccupied with "whether the company could handle the craziness of our current size. We never said, 'Well, someday we'll be 10,000, so let's not worry about the problems of being 2,000,' " Gates said.

As of Wednesday, the company counted 91,192 employees worldwide. Nearly 39,500 of them work in the Puget Sound region.

"But if anybody's wondering when we're going to have 180,000 people, stop wondering," Ballmer said.

Gates added, "No, I don't think we'll double again. But I've been wrong before."

About 800 employees, family members and figures from Microsoft's past attended live. Others watched on big screens in cafeterias around the campus and at their desks in Microsoft's offices around the world.

"It's an emotional day for everyone," said Tracy Chen, one of the employees who won a lottery to see Gates' send off in person. "I think he was very sincere and we were hearing a lot of personal stories."

Ballmer said he struggled with an adequate way to mark Gates' departure after more than three decades, the creation of a company and an industry for it to dominate. First, he gave Gates a scrapbook. Then he said an emotional thank you.

Every individual at Microsoft, "whether you started last week or whether you started 28 years ago," has the opportunity to contribute to society, develop as a professional, work with the best and the brightest in the world and prosper personally, Ballmer said.

"We've been given an enormous opportunity, and Bill gave us that opportunity," Ballmer said, choking out the words through tears. "I want to thank Bill for that and I want you to, too."

Benjamin J. Romano: 206-464-2149 or bromano@seattletimes.com

Copyright © 2008 The Seattle Times Company

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