William H. Gates III, one of the upstart pioneers of the personal computer industry a dozen years ago, has persevered to become one of its giants today, a 35-year-old multibillionaire with the potential power to influence the course of the entire industry.

His Microsoft Corp. is the world's largest producer of personal computer software, led by the MS-DOS disk operating system for IBM and other personal computers, Macintosh software and the fast-selling Windows program that permits personal computer users to handle different jobs quickly and simply on a single screen.

Gates's goal for the 1990s is a new generation of software that would dramatically expand the amount and variety of information available to computer users, while simplifying access to the material at the same time -- an approach Microsoft calls "information at your fingertips."

In a recent meeting with Washington Post reporters and editors, Gates had this to say about the future of personal computers.

Q: What has to happen for your notion of "information at your fingertips" to become a reality?

A: The software requires a mix of skills that no existing company can claim to have. It's not just writing code {the detailed instructions that enable computers to carry out human instructions}. Code is part of it, but so are images and sound and animation.

We've spent five years now putting together the rights to images {of well-known paintings and photographs} and maps and music scores and sound to serve as our master database.

It's a new thing and it will enable home and office computing to get into a broader set of uses and will play a fairly significant role in education -- something the computer has not yet done, you'd have to say.

Getting the rights to build a product like this is very hard.

Q: It's not just software that has to evolve?

A: Screens are going to improve dramatically. We're going to get big, flat screens. In fact, the question will be, in any office, what part of the surface area do you want to be a screen. You can touch any piece of information displayed on that screen and ask for more detail or use some kind pointing device, a stylus or laser gun, whatever you like, to zoom in on the data that's there...

Q: You're banking on the computer and its screen as the vehicle for displaying this information. The data will be stored on compact discs ...

A: If this happens in one to three years, it's the CD. If you're more patient, there will be other kinds of technologies... .

Let's say, for example, you put the Sears catalogue onto a CD. The first thing you see when turn the computer on {and ask for the catalogue} is the home. You walk around this home and say, you want to buy a rake, so you go over to the garage, open it up, see all these rakes. It shows you all the choices. Maybe it's hooked up through a phone connection to Sears to show you the specials available for rakes at that time or to let you place an order.

Q: What does this say about the future of newspapers and magazines?

A: Hopefully, this broad availability of information preserves curiosity in people and makes them more interested in what's going on.

Q: That's sounds like the right answer for this group. Now, give us the truthful one.

A: No, this is the truth. Paper has such huge advantages in terms of its cost and portability... . A computer screen today is such an ugly little thing to look at. Even at Microsoft, any memo over two pages, it's considered rude to send it on the computer screen. Well, not necessarily rude, but you're going to print it out and look at it to read. So the computer may be transmitting it, but we're going to print the thing out... .

Let's get far out. Suppose you have in your house large surface areas for screens, so whatever art you want to see, whatever pictures of the world you want to see, or let's say every morning whatever news you're interested in will come up.

Supposedly, based on articles that you browsed in the past or specific indication of interest, you're seeing a newspaper -- that's your newspaper with the basketball scores at the front, certain stocks in the middle, that kind of thing. This narrow casting concept may be possible and that's quite different than newspapers are today.

Then again, part of the value of the newspaper is sort of a norm -- what everybody else is reading: Not only do I want to know what other people know, I sort of want to have something to talk to them about... . The idea of having customized newspapers, news alerts for people -- that will start at the very high-end of the business markets.

Q: You operate a very elevated level of technology. Where do you get your people from?

A: They come from science. In order to prove to us you have the crisp thinking and IQ level that we want, except in very rare cases, you have to have worked in some kind of science -- physics, chemistry, math or computer science. We're willing to take people who haven't done much computer stuff who've worked in the pure sciences just because a lot of our very best people were PhDs in physics and math. Then when they move over to computers, it's just simple stuff.

In the United States, we have 15 target schools. In Canada, there are four target schools. Japan has six. Target means we actually go on campus, we know professors there. Every year we're asking the professors, 'Who should we be after?' We're hiring people from those universities everywhere. We hire more from the University of Waterloo, in {Ontario} Canada, than anywhere else.

This recruiting effort is one of the most fun things we do.

We interview them on campus, or if you're not at one of the target schools, you have to send a sample of your science work or your coding work... .

Q: How much competition do you see from Japan in, say, 10 years from now?

A: We're in an unusual part of the software industry, which is this packaged software for personal computers. The only country in the world where we're not the largest personal computer software company is Japan. That is because we fail to do a Japanese word processor, which is by far the largest application category in Japan.

I actually don't see much direct competition in that area. We got into Japan early enough. The way they do capital formation over there hasn't created companies like ours, really... . So we don't see that much competition.

Japan does great software. There was this crazy myth that {the} Japanese couldn't write good software. I never knew where that came from, because all the good video games -- not all, but a high percentage, a majority -- were invented in Japan by individual creative programmers... . Software requires sticking with something, working hard, lots of engineers. That's ... you're talking about Japan now.

But our business is so dominated by U.S. companies it's strange.

Q: Most of the people who come here from your industry talk about what they want the government to do, why the U.S. is falling behind Japan in competitiveness and you haven't mentioned any of that. Are these important issues? Are they irrelevant? Is there just not that much that Washington can do that's helpful in this industry?

A: Something the government can do to help is to get copyright laws passed in different countries {to protect against pirated copies of American-made software}. The U.S. government is doing a great job of that. They made it their top agenda.

Beyond that, the question is, are you suppose to have somebody to worry about when you wake up in the morning? Sure, I think so. Well, it happens to be the Japanese. They're very good -- across the board -- they seem to be hard-working, they have good companies. Who else is preventing America from getting lazier and lazier? I mean, if {the government} put the fix in, maybe we would just get lazy. I don't believe there is a grand conspiracy against us, you know, that these guys were going to get together against us in some way. That's Japanaphobia, which I don't believe in.

Now when you look at a particular industry like the {computer} chip industry, then I agree, it's not as easy to just say, well, too bad, our guys didn't do a good job. We were the creators of so many of the innovations. It would be disappointing to see it essentially disappear.

Q: So you're not interested in government support for important new technologies, like advanced computer screens, for instance, or high-definition television?

A: There's some very poor thinking going on when we think {high quality screens} are going to be made in the United States. I don't care how much money the government throws at it, they're not going to be made here.

I believe in this thing called digital transmission. {Television signals would be converted into computer language and then transmitted electronically, creating the possibility for dramatic improvements in viewing quality and enhancements.} Digital transmission, which would probably take 10 years to catch on, no, 10 to 20 years. It is very chip-intensive and it's cool. That's going to be great and the U.S. chip companies should find a way to get involved with it. But the screens themselves, we got out of that a long time ago and there's no reason to get back in.

Q: Listening to you today, you seem like such a nice guy, but some people say you are not at all nice to your competitors. Is there a Jekyll and Hyde quality there?

A: Well, you can interview me after midnight. We have never sued anyone. Ever. ... I think that with the level of success we've had there are pretty positive feelings toward us.

Q: What is wrong with the world from where you sit?

A: Oh, I have a very positive attitude... . The fact that we might go into a recession, that's not the end of the world. At Microsoft, we have five-year product cycles, tons of cash. A majority of the company is owned by two people who can afford to think very, very long term, so that's not a huge concern.

I tend to be pretty upbeat because of the number of new companies that are being started in our business, the number of new ideas that are coming along, the way that we feel our products are affecting people's jobs. The potential to create tools that help in education is very significant.

Q: Is it still an industry where a couple of people can quit their jobs and go out and do a prototype idea and ...

A: Absolutely. That's happening all the time. They're not starting in writing a word processor but they have some wild ideas about how to write the words for you. They do something new.

There's so much opportunity and it's happening all the time. They don't have to worry about training people, three or four really great programmers are so productive and if you're focused on what you're doing. That kind of thing is happening. It'll continue to happen.



In terms of doing radical things, Apple hasn't had anything since 1984. And in fact, some people -- not me, but some people -- have criticized them for that. If Apple doesn't show something they've done with that {profits}, their market share certainly in some areas will drop off. But I have faith that Apple will do new things.

GATES ON STEVE JOBS, former Apple Computer founder who is producing a new computer called NEXT:

Well, he has a great product. Now his product comes with an interesting feature called incompatibility. That is, it doesn't run any of the existing {IBM or Apple} software. Not joking around, it's a super-nice computer. I don't think if I went out to design an incompatible computer I would have done as well as he did.

Now he's made signigicant improvements in the machines, so the question has to be asked again: Will he sell the quantities that justify {Microsoft and others} writing software for it?

Steve is a unique individual. Very high talent. People pay attention to what he does in a way that is an asset as well. And so I spend time talking to Steve -- I'm going to go down and see him in January. I still am taking the posture that I'd like to focus on Mac {Apple's Macintosh} and Windows and not divert time off for the Next machine. But I'm going to go down and hear what he can tell me about it. Who's buying this machine, where is he taking it in the future? And see, because if I'm wrong, it's very bad business judgement.

But it is kind of an awkward thing, becuase Steve and I worked so closely together on the Mac, and that was a lot of fun.