Gates and Jobs share stage, friendly banter at D5

CARLSBAD, Calif.--Microsoft Chairman Bill Gates and Apple CEO Steve Jobs took the stage at the D5 conference Wednesday night for a rare joint appearance.

I'm in an overflow room with a half-dozen other reporters, many of whom flew to San Diego to watch the main event on TV from a room several hundred yards from the ballroom.

The keynote kicked off with a 1983 video of a young Jobs hosting the "Macintosh software dating game" with three software CEOs--Gates, Mitch Kapor of Lotus and Fred Gibbons.

In the video, a young Gates in a blue polo shirt tells Jobs how important the Mac is to Microsoft. "During 1984 Microsoft expects to get half of its revenue from Macintosh software," Gates says.

It moved on to a video of the famous 1997 Macworld conference where Jobs announced Microsoft's investment in Apple. In the video, Gates appears via satellite to a chorus of boos from the Macworld crowd.

Four people then walk out on the D5 stage--Gates, Jobs and Wall Street Journal columnists Kara Swisher and Walt Mossberg. Jobs is wearing his trademark black mock turtleneck, jeans and tennis shoes. Gates is wearing a button down shirt, dark pants and shoes.

The discussion began with Swisher asking each what the other's biggest contribution was.

"Bill built the first software company in the industry," Jobs said. "The business model turned out to be one that worked very well for the industry. Bill was really focused on software before anyone else had a clue."

Gates responded by first noting that he is not the author of a popular Steve Jobs satire site.

"I want to clarify I'm not Fake Steve Jobs," he quipped.

Gates praised Jobs for pursuing the idea that the computer could really be a mass-market product and then for betting heavy again on the Mac, despite the Lisa's lack of popularity.

They then delved back into the early days of the Mac when Microsoft and Apple worked closely together.

"When Steve first came up, it was going to be a lot cheaper computer than it ended up being," Gates said. "That was fine."

They discussed the Mac versus PC ads.

"PC guy is great," Jobs said.

"His mother loves him," Gates quipped back.

"PC Guy is what makes it all work," Jobs said, leaning over to Gates. "It's worth thinking about."

It was noted that when Microsoft was developing the Xbox it used Macs as early hardware references, since the Xbox used a member of the PowerPC family of chips that Macs used at the time. "We never ran an ad on (that)," Jobs said.

"Steve is so known for his restraint," Gates replied

Both Gates and Jobs shrugged off the notion that the computer is waning as more and more work is handled via the browser. "The PC has proved to be very resilient," Jobs said, later clarifying that he was referring to the PC generally, not Windows specifically.

At the same time, both talked about the explosion in portable devices and the opportunities there.

Mossberg shifted discussion to the Internet. He noted that Apple talked about personal Internet services when it introduced .Mac several years back, but that it hasn't really kept pace. "I couldn't agree with you more and we'll make up for (lost time) in the very near future," Jobs said.

The formal discussion ended with each of them being asked about any misunderstanding in their relationships.

"We've kept our marriage a secret for over a decade now," Jobs joked. Gates stayed silent for a while then said that neither of them really have anything in general to complain about vis a vis the other. "It's been fun to work together," Gates said. "It's nice when somebody sticks around."

Jobs noted that in their early meetings, the two were often the youngest people in the room and now they are often the oldest.

He then quoted the Beatles' song "Two of Us," off the Let It Be album. "You and I have memories longer than the road that stretches out ahead," he said. The pair got a standing ovation, and Jobs appeared to get a little broken up.

The two were asked about what they see as their legacy, particularly with Gates balancing his Microsoft work with his humanitarian work.

"The most important work I got a chance to be involved in, no matter what I do, is the personal computer," Gates said. "That's my life's work."

He said he was fortunate to develop skills that lend themselves to his humanitarian work, but he said it's software that's still first on his mind. "If you look inside my brain, it's filled with software, the magic of software, my belief in software," Gates said.

Both men noted what stood out about the other. Gates said he admired Jobs' intuitive taste when it comes to picking both people and products. "The way he does things, it's just different," Gates said. "It's magic."

For his part, Jobs said that he admired Microsoft's ability to partner with other companies.

"Because Woz (Apple's co-founder, Steve Wozniak) and I started the company based on doing the whole banana, we weren't so good at partnering with people," Jobs said. "I think if Apple could have had a little more of that in its DNA, it would have served it extremely well," Jobs said. "I don't think Apple learned that until...a few decades later."

The discussion ended with Gates predicting that most of the things that are now the stuff of science fiction, virtual reality and the like are likely to come true, with the exception of a teleporter. Unless Steve has one up his sleeve, Gates said.