The only thing I'd fault Gates for is holding such enormous amounts of cash.
I think what he is doing is looking around for the right opportunities. Consider him pouring money into Winstar yesterday, or into Nextel, or into AT&T. I think he is being extremely smart about how he spends the cash. When one thinks about it, what he is doing is buying "effective control" of the bandwidth, instead of buying the bandwidth itself! For a 5% investment in AT&T, he has virtually guaranteed which company's set-top OS will be used. For a 13% investment in WinSTAR, he is virtually guaranteeing what email system will be available by default when you sign up with WinSTAR.
In other words, bandwidth is a capital-intensive, low-margin, business, where you need a lot of operating experience to eke out a profit. So, rather than get into that kind of a morass, he is cleverly buying enough control so that it ensures that the high-profit software business keeps coming to him. Without paying the cost of investing in low-margin businesses, he is buying enough control to feed his high-margin business.
IMHO, the guy is a bonafide genius.
Milan |
