Jane Wakefield: Gates gets his coat, Case gets an empire

It is unlikely that Steve Case and Bill Gates shared a festive eggnog this Christmas but, in what turned out to be a remarkable week of general shuffling about, the mighty tech duo were forced to share the headlines. And, judging by their separate stories, they also share an ambition -- to dominate the Internet as we enter a new millennium.

While most empire builders retire gracefully to spend more time with families and friends when their businesses peak, Bill Gates has decided to withdraw from the fight when his empire most needs him. And it is not to spend more time with his family but with his computer.

The geek with the Midas touch claims he wants to return to the humble role of technologist -- Web master in charge of driving Microsoft's Martini ambition (anytime, anyplace, anywhere) and devise the killer software that will put the Internet onto wireless and mobile devices.

I don't buy it.

Gates never comes across as a man who is ready to relinquish power and return to what he thinks he does best -- developing software. For the more cynical Microsoft watchers -- and I agree with them -- the real reason for Bill's decision to let his friend run the business is to prepare himself to head up the splintered software company as Microsoft licks its post DoJ wounds. Far from fading into the background, he is simply waiting to take up the new reins following the split of his beloved company into an operating systems division and a software division. With bad press for both Windows 2000 and Windows CE in recent months, many may say that in going with software, Gates is backing the best horse.

On the other hand, you could go with the more pessimistic view of one ZDNet reader who believes the world is in for a software shock. (if you want to read what other ZDNet readers have to say, visit the Mailroom) On hearing the news, systems engineer Michael Maginnis reacted thus: "Uh-oh... If you thought Microsoft software was bad before, just imagine what's going to happen now that Gates can devote ALL his time to screwing it up."

Whichever theory you go with, it cannot be denied that Gates is throwing in the towel at the worst possible time. It reminds me of the Fast Show character who can never quite fit in to any social situation and finds himself making an embarrassed early exit. In the same way, Gates has watched the Microsoft position deteriorate over the months and has finally admitted defeat.

"I'll get my coat," he was heard to say to 'Bash 'em Ballmer' on his way out the door.

Meanwhile in the squeaky clean world of AOL, Mr Case has found himself opening the door of a very big company indeed. The road from an Internet startup to the biggest merger in history has been, unlike the Internet itself, remarkably quick. Case founded AOL in 1985 (not long after giving up his job as a pizza delivery boy) and no one would have predicted then that he would be a media mogul just 15 years later.

But the guy had a dream. Case is another fervent believer in the Martini Internet, and the only thing he needed to make that dream a reality was a new means of distributing the AOL message. In Time Warner he found not just content but the infrastructure to deliver Internet via cable to around 20 million American homes.

While the markets cannot decide whether the mixture of family-based Internet service provider and cable and content giant is a good one, most observers think the merger will, eventually, benefit consumers. With some big fat cable pipes in its hands, AOL can speed up broadband access and give its subscribers the chance to download Friends, Batman and Van Halen's greatest hits to their hearts' content.

The deal will have far more impact in the States than in the UK, as the majority of AOL's 20 million subscriber base resides across the pond and the cable revolution is happening much faster there than it is here (don't start me on the reasons why!).

In the UK, there has been speculation about similar Internet/infrastructure/media deals -- Freeserve and Murdoch's News Corp. for example. Whether erstwhile Net sceptic Murdoch is ready to climb in bed with any Net company remains to be seen and in the UK, the issue of cost needs to get sorted out before any major deals have a chance.

If consumers think that going on the Net is going to damage their wallets, no amount of fast access or exciting content will persuade them that long term surfing is anything but a mug's game. For the industry, a lot of ISPs and content owners will be watching the AOL deal closely in coming months -- with many secretly hoping the newly empowered ISP will fall flat on its face.

That seems unlikely, but anyone who saw the maniacal smile on Steve Case's face as the deal was sealed will be forgiven for wanting to wipe it off.

Take me to the MS v DoJ News Special

I want to read the Roundup on the AOL/Time Warner merger.

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