Gates: PCs fall short

In a chat with engineering students at the University of California at Berkeley, Gates said there is much work that needs to be done if the PC is to fulfill its promise. While maintaining that the "glass is half full," he said computers are still not as reliable or usable as they need to be.

"It falls so far short of what it should be," Gates said, urging further work in areas of artificial intelligence that could allow computers to finally handle long-predicted tasks, such as speech recognition.

The talk was the first stop on a day that will take Gates through the topics of education, philanthropy and industry. At lunch, he received a philanthropy award from Community Foundation Silicon Valley. In the afternoon, he will talk to others in the tech industry in a speech at the Computer History Museum in Mountain View. His trip follows a tour of five East Coast colleges earlier this year.

Gates said America's top research universities, including Berkeley, are the country's biggest edge, as it is forced to compete more directly with other nations for tech jobs. But he cautioned against protectionism, warning that wealth is something that needs to be spread throughout the world.

Asked about Microsoft's biggest contribution, Gates said it is the creation of the software industry that came with the PC. But he also said the Tablet PC--a pet project of his--is pretty neat, too, as will be the next version of the Xbox.

The next Xbox "may not be good for productivity, but it will be fun," he said. While not offering too many details on the device, he said communications will play a bigger part in the gadget, as will the idea of having an audience in addition to just players. "It's not just one person sitting there shooting at artifacts," Gates said.

He addressed business challenges such as how to deal with piracy in China--99 percent of Microsoft software is not paid for in the country.

"We can't just charge in there and say overnight, 'You've got to change that,'" Gates said. We need to "strike the right balance about intellectual property in that venue." Over time, Gates said he would like to see at least the businesses paying for the software but said there is not an obvious path for the company to follow: "Sometimes we will do too much, and sometimes we will do too little."

America's richest man also talked about the ups and downs of giving money away, which he said can be a harder job than making it in the first place. It is easy to tell what works in business, but much harder in the nonprofit world.

Originally, Gates said he planned to wait until his 60s to start giving away his fortune, after retiring from Microsoft.

"I thought it might be schizophrenic, where you had one part of the day where you say 'Let's make money' and then in the afternoon you say 'Let's give it away,'" he said.

But Gates said that as he was reading about trends in population control and diseases, he became convinced that he could not wait. He said he has tried to focus on diseases that affect the developing world.

While "rich world" diseases get plenty of drug industry and government research funding, he found out that just 0.1 percent of research was going toward malaria, a disease that kills 1 million people a year. One type is currently afflicting 200 million people.

"I was stunned," he said, noting that he doubled the research being done on malaria when he gave $50 million toward it.

The reaction to Gates at the notoriously left-leaning school varied widely.

A handful of students passed out fliers before the speech, taking Microsoft to task for its business practices and universities to task for allowing companies like Microsoft to dictate a corporate curriculum.

Several of the students involved in that effort took issue with Gates' assertion that companies can't build a business around software that is distributed under the General Public License (GPL).

Gates: open source is a trade-off

But other students said they were inspired by Gates.

"They don't really realize how difficult it is to be in a position like that and how much good he has done," graduate engineering student Ben Wild said.

Still, others found a lesson for their own lives. "He did make a lot of money, but he's doing work that he just likes to do," said Jorge Yugovic, a Chilean engineering student who is at Berkeley to study economics.

As Gates headed to his next stop, two of Microsoft's Bay Area-based "developer evangelists" stuck around to meet with the students who took issue with the company.

"There are plenty of times when we get reamed out," said Keen Browne, a former Linux enthusiast who joined Microsoft about a year ago. "I think we need to do that."

Graduate student Morgan Ames said she was glad to talk with the Microsoft representatives but said it doesn't erase what Gates said. "He kind of misrepresents things a lot," Ames said. "Most of the people that went out of here went out with the wrong impression."