BELLEVUE, WASH. -- Lotus Development Corp. is opening a major sales office in the backyard of archrival Microsoft Corp., but it says no offense is intended.

No offense taken, says Bill Gates, Microsoft's chairman and chief executive.

"There is no real personal animosity. We know each other quite well," Jim Manzi, the chairman and chief executive of Lotus, said of Gates. "I am coming out to {Seattle again} in March. I think I am having dinner at his house, actually."

Last year, Microsoft edged out Lotus as the world's largest manufacturer in the personal computer software industry. But both Gates, 32, and Manzi, 36, say there are no hard feelings after business hours.

Manzi said the new 13-person office in the Seattle suburbs is more a tribute to the Northwest's growing software market than a jab at Microsoft -- or a way to raid Microsoft talent.

Gates acknowledged he's curious about the new office in the town next to Microsoft's corporate headquarters in Redmond, but far from threatened.

Last spring, when Manzi announced a software alliance with International Business Machines Corp., he said his goal again was to make Lotus "No. 1 in software, period."

"I'm not going to make it easy on the guy," Gates said when asked about Manzi's chances.