Gates on Brink of Losing His ‘Richest’ Title
Bill Gates, the builder of the Microsoft empire, is poised to tumble from his once-unassailable perch as the world’s richest man.
He is likely to be supplanted by another software titan, Oracle Chairman Larry Ellison, a rival who has delighted in bashing Gates over the years.
Since the mid-1990s, Gates has ruled as king of the multibillionaires, towering over a gaggle of Japanese land speculators, American investment moguls, Saudi oil sheiks and Hong Kong real estate barons.
But the plunging price of Microsoft stock in recent months, combined with vast gifts to his charitable foundation, have reduced Gates’ astounding $90-billion holdings in Microsoft stock to a merely awesome $49.4 billion. Gates has at least an additional $10 billion in holdings outside Microsoft, according to Forbes magazine.
At the same time, the enormous run-up in Internet-related stocks has boosted the fortunes of Ellison, the charismatic founder of database maker Oracle Corp. Ellison has almost made a second career out of deriding the Microsoft founder as a conniving salesman of second-rate technology.
As recently as last year, Ellison ranked only 22nd on Forbes’ list of the world’s wealthiest people, with a personal net worth of $9.5 billion.
But the growth of Oracle--a maker of advanced database software that has poured itself into the Internet revolution--has more than quintupled Ellison’s fortune to more than $48 billion.
On Monday alone, Gates sustained a $9.1-billion loss on paper as Microsoft shares fell, while Ellison’s wealth rose by $1.1 billion.
The expected rise of Ellison to the top of the multibillionaire heap is a sign both of continuing upheavals in the world economy as well as the increasing dominance of the Internet in global commerce.
“It’s all tied up in the world shifting from a ‘PC-centric’ vision to more of an Internet world,” said Robert F. Foster, executive director of the Center for Management in the Information Economy at UCLA’s Anderson graduate school of management. “Oracle has done a good job of re-morphing itself into an Internet play.”
Fortunes Going Up and Down Quickly
The horse race between Gates and Ellison also reflects the recent volatility of the stock market, which has vaporized fortunes at a blistering pace during the last few weeks.
Foster said these gyrations guarantee that Gates, Ellison and others will probably trade places as king of the hill many times in the coming months as the stock market sorts itself out.
Indeed, last month Cisco Systems Inc., the maker of the largely unseen computing devices that route information across the Internet, knocked off Microsoft as the most valuable company in the world. Cisco was soon knocked off its perch by General Electric--an old-line company that has managed to give a lashing to all the “new economy” companies.
For all the symbolism of the changing economic fortunes, the contest between Gates and Ellison for the title of the world’s richest man is a tale of two very different entrepreneurs with outsize egos who through their will, connivance, acumen and hubris have exerted an enormous influence on the technological revolution.
Gates is the quintessential nerd. With his trademark glasses and innocent half-smile, he looks, even at 44 years old, like a gawky kid who spills soda on his computers while writing software code late at night.
Ellison, 55, cuts a dashing figure in the Silicon Valley landscape, appearing at conferences in dark turtlenecks and designer suits. He has been married and divorced three times and is famous for his taste for fast cars, beautiful women and very expensive toys.
“Larry almost wants to be the devil on your shoulder, and Bill wants to be the angel,” said Mike Wilson, who has written the only biography of Ellison, “The Difference Between God and Larry Ellison: God Doesn’t Think He’s Larry Ellison.”
Their backgrounds are a study in contrasts--and some odd similarities, such as the fact that neither one ever graduated from college.
Gates was born in Seattle in 1955, the son of a prominent attorney. He lived a privileged childhood, attending the private Lakeside School, which was known for its rigorous academic focus.
It was at Lakeside that Gates discovered computer programming. While still in high school, he started a software company with his friend Paul Allen.
Gates’ big break came in 1980, when IBM was seeking an operating system--the basic software that controls the functions of a computer--for its soon-to-be-released personal computer.
Gates paid a local programmer $50,000 for an existing operating system and, after adding a few features, renamed it MS-DOS, for Microsoft Disk Operating System.
Gates used his hold on MS-DOS to build Microsoft into a powerhouse not just for operating system software but also for other programs, such as word processors and spreadsheets.
Microsoft has been fierce and unrelenting in its quest to seize control of every aspect of the personal computer, and its campaign has cast Gates, despite his boyish appearance, as a brutal monopolist. But at the same time, Gates has also grown beyond his role as businessman. During the last year, he has donated about $20 billion of his wealth to a charitable foundation known for its concern about the health of children in the Third World.
Microsoft’s recent antitrust troubles stem from the company’s effort to squash competitors in the Internet browser business.
Just four months ago, Microsoft stock stood at nearly $120, but Microsoft’s own warning last week of weaker sales and the general reverse euphoria over technology stocks have sent the stock plunging. The company’s shares dropped $12.31 on Monday to close at $66.63.
Ellison was born far from Gates’ privileged world in New York City to an unwed teenager who gave him away when he was 9 months old to be raised on Chicago’s South Side by his aunt and uncle, immigrants who abandoned their Russian name and fashioned a new one after the Ellis Island immigration center.
Ellison attended the University of Illinois for two years but dropped out soon after his adoptive mother died.
He left for California and supported himself as a programmer, a skill he had picked up in high school.
What launched Oracle was an idea originally developed by IBM in the 1970s to create databases that were more than just huge collections of numbers and text.
Ellison was one of the early developers of these so-called relational databases, which gave programmers the ability to tag each number and word with extra information describing their meaning and connection to other entries in the database.
“The genius of the relational database is that it turned data into information,” Wilson said.
Oracle struggled in the early 1990s before bringing in more experienced management and Ellison shifted the company’s focus toward the Internet. Its software has become the foundation for putting together complex Web sites and running large corporate systems that depend on the Internet for transactions and communications.
Oracle stock has risen during the last year from $11.25 to a closing price of $72.44 on Monday.
Foster said the long-term trend points to the ascendance of Internet companies in the coming years as the dominant force of the world economy.
“It is a major and permanent change in the economy,” he said. “It’s easy to point at Ellison, but this is about technology at its finest exerting its power in the markets.”
Gates May Not Care About Ranking
Microsoft and Oracle compete in only a few areas, but Ellison has fostered a public persona over the years seemingly designed to contrast with Gates’ nerdy image.
Gallons of ink have been poured describing the rivalry between the two men, but Wilson believes it largely was a ploy created by Ellison to increase his profile when Oracle was nowhere near as large as Microsoft.
“Larry is so brilliant and instinctive in his thinking and so immature in his conduct,” Wilson said. “He’s an uncontrolled adolescent. There are real adults in charge of the company. He’s the crazy visionary.”
Neither Gates nor Ellison had any comment Monday on their wealth, leaving the world to guess what it must feel like to have the most marbles in a game only they and a few others can play.
Wilson said Ellison probably would take enormous satisfaction in ascending to the top of the heap after spending so many years deriding Gates while being far below him on the wealth list.
“Larry has always cast himself as a rival to Bill Gates,” Wilson said. “It’s all Monopoly money at that level, but my guess is that Larry cares a lot about this.”
Stephen Manes, who co-wrote a biography of Bill Gates, said the Microsoft founder would probably not be unduly bothered about being passed by Ellison.
“Bill is much more interested in being seen as smart than rich,” Manes said.
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Battle of the Titans
Larry Ellison, chairman of Oracle Corp., has drawn within shooting range of surpassing Bill Gates’ status as the world’s richest man. A look at the two men:
Larry Ellison
* Position: Chairman
and chief executive of Oracle Corp.
* Age: 55
* Date of birth: Aug. 17, 1944
* Birthplace: New York. Born to an unwed mother; later adopted by aunt and uncle.
* Current residence: Pacific Heights neighborhood of San Francisco
* Typical dress: Black turtleneck and dark suit
* Marital status: Single; married three times, divorced three times.
* Shares of Oracle Corp.: 663 million
* Value of shares: $48 billion
*
Bill Gates
* Position: Chairman and chief software architect of Microsoft Corp.
* Age: 44
* Date of birth: Oct. 28, 1955
* Birthplace: Seattle
* Current residence: Medina, Wash.
* Typical dress: Polo shirt and khakis.
* Marital status: Married Jan. 1, 1994, to Melinda French. They have two children, Jennifer Katharine Gates, born in 1996, and Rory John Gates, born in 1999.
* Shares of Microsoft Corp.: 742 million
* Value of shares: $49.4 billion
*
Richest People in the World
*--*
Worth Year Name Source Country (in billions) 1999 Bill Gates Microsoft Corp. U.S. $90 1998 Bill Gates Microsoft Corp. U.S. 51 1997 Sultan of Brunei Head of state Brunei 38 1996 Bill Gates Microsoft Corp. U.S. 19 1995 Bill Gates Microsoft Corp. U.S. 13 1994 Yoshiaki Tsutsumi Seibu Railway Group Japan 9 1993 Yoshiaki Tsutsumi Seibu Railway Group Japan 9 1992 Taikichiro Mori Mori Building Japan 13 1991 Taikichiro Mori Mori Building Japan 15 1990 Yoshiaki Tsutsumi Seibu Railway Group Japan 16
*--*
Sources: Forbes magazine, Times research
*
SHARES PLUNGE
Threat of a breakup and sales warning send Microsoft shares down 15.6%. C1
