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Charlie Rose Talks to Nathan Myhrvold

The former Microsoft CTO and co-founder of patent aggregator Intellectual Ventures on the forces reshaping the industry
Charlie Rose Talks to Nathan Myhrvold
Photograph by Kevork Djansezian/Getty Images

You worked for years at Microsoft, where things now look uncertain. How do you see its future?
I worked at Microsoft for 14 years, very closely with Bill Gates and Steve Ballmer and others. And it will always have a part of my heart. It’s still an incredibly strong, strong company, with some great internal values. But I think it’s lost its way in a few dimensions. There are so many agendas it’s working on: back-office software, office productivity things, Microsoft Office. It has this huge operating system business in Windows, but it’s also trying to do Xbox, which it’s been quite successful with. It’s doing smartphones, which has been more of a challenge. It’s competing in search. There’s a lot going on.
You can say Google has a lot on its plate, too. Why is it different?
The set of tasks Microsoft has been engaging in has been so large, it’s been hard for them to be as consistently innovative. The other thing is, the things they do well have been maturing. The difference between Google and Microsoft is largely that search and Android phones are on the upswing, where being the best company in a growing market is great. Microsoft’s core markets have been mature. They haven’t been growing as fast.

But Microsoft was looking at tablet and voice recognition before anybody.
You know, Apple was looking at smartphones before there were [cellular] phones. It was called the Apple Newton, and it was a terrific thing for them to try, but it was also a dismal failure. Most overnight successes come after repeated attempts and failures. You’ve got to keep at it. So Microsoft actually was a tablet computing, pen computing company before many of these guys were out of high school. But those efforts were premature. When it came to the current era, those other guys got a jump. And technology is a thing where if you come in early and you’ve got a great product offering, you can really distance yourself.
Steve Ballmer leaves next year. How hard is it to find a CEO to replace him?
There’s a popular perception that they’re adrift. And the longer you let that go on, the more scrutiny is on what your next choice is. The pressure on the board has got to be amazing, because people are going to be second-guessing, third-guessing any choice they make. I don’t envy them. But I’m very optimistic they’re going to come up with a great leader.
What was it like having Bill Gates for a boss?
Bill is one of my closest friends. And he has been historically one of my best supporters. I was a nerdy guy who, in most companies, I don’t think would have risen or been backed, anything like Bill backed me. One of my favorite e-mails he ever sent me … I proposed this crazy project. And he sent back this two-line response: “This has got to be the craziest thing you’ve ever suggested. Please proceed.”
Tell me about how you see the patent landscape evolving.
When I came to Microsoft, we had two patent applications, zero patents. Fast-forward to today, a company like Apple has tons, and they’re tired of seeing someone else copying them. Samsung, for their part, either says, “Gee, I think it’s legitimate for us to copy them because those things aren’t protected,” or “Yeah, maybe we copied you, but maybe you copied us.” So you get these titanic battles. Apple has a market cap of about $500 billion. The others would like to compete for the next $500 billion. So you have a jump ball worth $1 trillion. They’re going to compete every way they can. I think we’ll find that Google, Samsung, and Apple will reach a patent stalemate at some point in the future.
So which one wins in the end: Android or iOS?
I think that’s the wrong question. Right now, Android and Apple are both hugely successful. And of course they can coexist. They’re coexisting now. It’s not clear to me that it will settle out that way.