On this day in 1975, at a time when most Americans use typewriters, childhood friends Bill Gates and Paul Allen found Microsoft, a company that makes computer software. Originally based in Albuquerque, New Mexico, Microsoft relocated to Washington State in 1979 and eventually grew into a major multinational technology corporation. In 1987, the year after Microsoft went public, 31-year-old Gates became the world’s youngest billionaire.
Gates and Allen started Microsoft—originally called Micro-Soft, for microprocessors and software—in order to produce software for the Altair 8800, an early personal computer. Allen quit his job as a programmer in Boston and Gates left Harvard University, where he was a student, to focus on their new company, which was based in Albuquerque because the city was home to electronics firm MITS, maker of the Altair 8800. By the end of 1978, Microsoft’s sales topped more than $1 million and in 1979 the business moved its headquarters to Bellevue, Washington, a suburb of Seattle, where Gates and Allen grew up. The company went on to license its MS-DOS operating system to IBM for its first personal computer, which debuted in 1981. Afterward, other computer companies started licensing MS-DOS, which had no graphical interface and required users to type in commands in order to open a program. In 1983, Allen departed Microsoft after being diagnosed with Hodgkin’s lymphoma; he was successfully treated for the disease and went on to pursue a variety of other business ventures.
In 1985, Microsoft released a new operating system, Windows, with a graphical user interface that included drop-down menus, scroll bars and other features. The following year, the company moved its headquarters to Redmond, Washington, and went public at $21 a share, raising $61 million. By the late 1980s, Microsoft had become the world’s biggest personal-computer software company, based on sales. In 1995, amidst skyrocketing purchases of personal computers for home and office use, Windows 95 made its debut. It included such innovations as the Start menu (TV commercials for Windows 95 featured the Rolling Stones singing “Start Me Up”) and 7 million copies of the new product were sold in the first five weeks. During the second half of the 1990s, Internet usage took off, and Microsoft introduced its web browser, Internet Explorer, in 1995.
In 1998, the U.S. Department of Justice and 20 state attorneys general charged Microsoft with violating antitrust laws by using its dominance to drive competitors out of business; in 2001, the company reached a settlement with the government that imposed restrictions on its corporate practices. Also in 2001, Microsoft joined the video-game market with the launch of its Xbox console, which proved to be a hit. However, in the first decade of the 21st century Microsoft fell behind companies such as Apple in the mobile-phone market and Google in the search-engine market.