Q&A: Gates' role as innovator, deal-maker, philanthropist

You're going to be talking here about new partnerships for Microsoft's MSN, Xbox Live and Mediaroom IPTV services that will provide more content to drive Microsoft's consumer entertainment strategy. Can you talk about what you needed to do -- on the technology side and on the business side -- to make these deals happen?

XBox Live is attracting virtually all the content people because of the volume we've got there, and they see this group of very engaged users spending a lot of hours and finding new media in that environment, so that's made it easy for us. Our announcement with NBC on the Olympics is about our innovations in Silverlight, where you can view interactive content, multiple video streams, so it's really a perfect match for the Olympics where you have all this different content and yet different people care about different parts of it.

As your consumer entertainment strategy comes to fruition, how will your business model change from what it has been in the past? Can you quantify goals for advertising-generated revenue?

We've seen good growth in our advertising revenue. That's an area where Google's the leader, and we need to be very innovative to drive the scale. A huge partnership with Viacom is helping us with that. We'll be signing up more partners around the world. Taking the advertising platform to scale is very valuable for things like the search property we offer.

We participate in a lot of business models. We have consumer software like games that you buy on a one-time basis. We have things that you can pay as a monthly fee, that we run up in our servers, as more of a service-type model. We have some software we give away for free. And so, ads are coming in as a big, strong component, but I don't see it replacing the others. We need all modalities to be strong.

In your philanthropic work, you've focused on fundamental health issues for the developing world. In the tech sector, there have been efforts such as the OLPC, and Microsoft's efforts to reduce prices in developing countries. But there's been criticism about these efforts. People have been saying, well, a US$200 laptop isn't going to do a kid much good if he doesn't live to age 5. With this in mind, what do you think technology companies -- that need to make profits -- can do to spur development in emerging markets?

Companies make their contribution by both giving some cash to broad areas but also by having their products in their area of expertise be tailored and donated to people who are poor. So in the case of Microsoft, we went and got involved in putting PCs in libraries. We went to Chile to put PCs in the libraries there, so by having a really robust machine connected to the Internet, going through the training, working with the government, getting all the pieces right -- we learned how to do that in the United States -- those projects were incredibly successful.

So while I admit for my foundation the top priority is health, Microsoft is about software. It's got a product, that's what the company knows. And that's where, in its activities around the world, its helping educators, it's helping kids who have curiosity, and I think that's fantastic for Microsoft to do that.

I'm taking the success that Microsoft had and putting tens of billions of that into the basic needs where breakthroughs can be made -- and there, we'll be using software. We'll be using mobile phones, we'll be doing data gathering, so we'll be using software as a tool to do it. I wish every company was doing as much as Microsoft is to take their expertise and look into that developing world and see what role they can play. We've had great impact, great success, and it helps us attract better employees. It makes our employees feel good because we were founded on the idea of empowerment. We're not just talking about it, we're out in over a hundred countries delivering it in a significant way.