As Microsoft grew from a small Albuquerque software venture into a major technology company, the partnership between childhood friends Paul Allen and Bill Gates became increasingly tense. Allen later recalled that Gates argued he was doing most of the work on Microsoft’s BASIC product and proposed that the company’s ownership be divided 60–40 in his favor. Allen accepted, but Gates subsequently renegotiated the arrangement to 64–36. The dispute became even more consequential after Allen was diagnosed with Hodgkin lymphoma and began withdrawing from Microsoft’s day-to-day operations in 1982 and 1983. While Allen was preparing to leave, Gates reportedly attempted to buy some of his shares for $5 each, a price Allen rejected. Allen left Microsoft with his holdings intact, retaining a 25.2 percent stake that later made him a billionaire when the company went public. The episode remained one of the most painful fractures in the company’s origin story, although Gates and Allen eventually repaired their personal relationship and donated $2.2 million to their former school, Lakeside, in 1986. They remained friends until Allen’s death in 2018.
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AI concept artworkArchive Record · 1980s
The Microsoft Share War: How Bill Gates Tried to Renegotiate Paul Allen’s Fortune
Paul Allen and Bill Gates / 1980s
As Microsoft grew from a small Albuquerque software venture into a major technology company, the partnership between childhood friends Paul Allen and Bill Gates became increasingly tense. Allen later recalled that Gates argued he was doing most of the work on Microsoft’s BASIC product and proposed that the company’s ownership be divided 60–40 in his favor. Allen accepted, but Gates subsequently renegotiated the arrangement to 64–36. The dispute became even more consequential after Allen was diagnosed with Hodgkin lymphoma and began withdrawing from Microsoft’s day-to-day operations in 1982 and 1983. While Allen was preparing to leave, Gates reportedly attempted to buy some of his shares for $5 each, a price Allen rejected. Allen left Microsoft with his holdings intact, retaining a 25.2 percent stake that later made him a billionaire when the company went public. The episode remained one of the most painful fractures in the company’s origin story, although Gates and Allen eventually repaired their personal relationship and donated $2.2 million to their former school, Lakeside, in 1986. They remained friends until Allen’s death in 2018.
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