Los Angeles - As per Todd Bishop of Settlepi.com,  Microsoft Corp. is grappling with "a lot of smart competitors," including Google and Apple, who are ahead of the Redmond company in some key markets, Bill Gates acknowledges.

But the Microsoft chairman on Tuesday said his company remains the overall industry leader, and he compared the current rivalries to legendary ones with Lotus, Novell and WordPerfect -- situations in which the Redmond company ultimately overcame steep odds to prevail.

"At any point in our history, we've had competitors who were better at doing something," Gates said in an interview with the Seattle Post-Intelligencer, underscoring the fact that it wouldn't be unprecedented to come from behind now.

That was one of the subjects addressed by Gates during the interview at the company's Professional Developers Conference, where Microsoft is seeking to rally support for Windows Vista and Office 12, the next versions of its dominant PC software programs. Among other things, the company showed plans to shift away from traditional drop-down menus to a new "ribbon" of commands across the top of the widely used Office programs.

Gates answered questions on a wide range of topics, including Microsoft's growth prospects in the Seattle region, its ambitions in China, and efforts to shore up the security of its software. Edited excerpts from the interview:

Q: You showed Office 12 here for the first time today. How do you think users are going to react when they see such a different look?

Gates: Well, this is the world's most popular application, and people sit and use it hours and hours a day, and so any advance we make in Office can actually drive up global productivity in a significant way. For years we've had the user interface confined to just these 2-D menus.

As Office has gotten richer, we knew that was a very limiting thing. It just wasn't very visual and so now, what we've done, it is a big deal. If you're a Word user, it should only take you 10 or 15 minutes to see how those things are laid out, so it's not like you're starting over. All the same concepts are there. The capabilities are there, and you will find yourself using more of the product.

You'll hear some people say, "Yikes, this is a change," but pretty quickly you'll hear from people about what a timely and important change it is.

Q: Companies such as Google and Apple have taken the lead in some key areas. Are Windows Vista and Office 12 a chance for you to recapture some of that buzz, and show that Microsoft plans to remain a central figure in the software industry?

Gates: Well, if you look at software very broadly -- productivity software, software tools -- Microsoft is the leader in way more respects than anyone else. Driving the research that will give us speech recognition and vision, and all of those big hard things that you've got to take a long-term approach in.

At any point in our history, we've had competitors who were better at doing something. Novell was the best at file servers. Lotus was the best at spreadsheets. WordPerfect was the best at word processing.

Right now, because of the breadth of what we do, we have that in many areas. Nokia is way ahead of us in phones; we're closing the gap. Sony is ahead of us in video games. We're just on the verge of something (the Xbox 360) that will help us close the gap there. In Web search, Google is the far-away leader. Big honeymoon for them. Even if they do "me, too" type stuff, people think, "wow." And Apple in music has done a fantastic job.

We've got all these areas -- like tablet computing, this Internet connectivity, or taking presentation to a new level, office productivity -- where we're just out there in front and we just need to keep pushing the frontiers.

In those areas where somebody else has done well, that's great. We'll match what they do, we'll bring new things to it, do it better and integrate it in with other things. And so it's very healthy for the consumer. We see that in search, we see it in music. It's not new at all that that's out there.

Q: Are there any features of Windows Vista that the U.S. antitrust settlement is keeping you from including, that you would otherwise want to include?

Gates: We're not being prevented from including features, and that's the strength of the settlement that we reached with the Justice Department and others. There's quite a bit of process we go through to make sure that the way we're putting them in and exposing them to third parties, that we're meeting all the requirements of that. But it's not preventing us from being very, very innovative and making it as rich as we want to.

For full story: http://seattlepi.nwsource.com/business/240541_gates14ww.html

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