A conversation with William Gates Sr. and Bill Gates Jr.

A conversation with William Gates Sr. and Bill Gates Jr. about the book "Showing Up for Life: Thoughts on the Gifts of a Lifetime"

CHARLIE ROSE: Bill Gates and his father, William Gates Sr. are here.
Together, they have had a productive and lifelong collaboration. The elder
Gates is one of his son’s closest advisers and confidantes. He’s a former
lawyer and civic leader in Seattle. He now serves as co-chair of the Bill
and Melinda Gates Foundation. He’s also the author of a new book called
"Showing Up For Life." It relays the wisdom of a life spent practicing
law, serving the community, and helping raise three successful children.

Joining me now, father and son, Bill Gates Sr. and Bill Gates. I’m
pleased to have them both at this table. Welcome.

WILLIAM GATES SR.: Glad to be here.

CHARLIE ROSE: Good to see you again.

BILL GATES JR.: Thank you.

CHARLIE ROSE: Your son knows this table.

WILLIAM GATES SR.: Yes, I know he does. It’s new to me.

CHARLIE ROSE: Let me just start with this. I mean, this is a story
about a family. Only two of them are here. There is your late wife and
his mother, and two siblings.

WILLIAM GATES SR.: Right.

CHARLIE ROSE: Why did you want to write this book at this time?

WILLIAM GATES SR.: Well, it started off -- you know, I’m 83 years
old. I have had a lot of experiences and had a lot of things that I
believe in, and I was going to write a memoir for my grandchildren and
future generations, because I didn’t have anything like that from my
predecessors. And as we got working on and I had some help with it, people
said, well, we should -- this is better than -- this is more important
thing to get out than to just give to your family and friends. We should
see if it might attract a wider audience, and so that’s the phenomena that
occurred is that people encouraged me to do this.

CHARLIE ROSE: How many grandchildren now?

WILLIAM GATES SR.: Eight at this point.

CHARLIE ROSE: My goodness. You said, Dad, the next time somebody
asks you if you’re the real Bill Gates, I hope you’ll say yes, I hope
you’ll tell them that you’re all the things the other one strives to be.
What is that? What is it the other one strives to be?

BILL GATES JR.: Well, my dad has set an example by what he does, you
know, whether it was at the university, speaking out on tough political
issues or going to war, or being a great lawyer. You know, he’s the one
who really got the foundation going, encouraged me to give early, got us
involved in some very key causes and helped us build what is now a strong
group of people that I -- I get to work with full-time. So my dad is
somebody I aspire to live up to what he’s done.

CHARLIE ROSE: To know you, and you and I have done interviews for a
while now, is to know of this insane curiosity. To read this book is to
know it started very early.

BILL GATES JR.: That’s right. A love of reading. A desire to ask
questions. And when parents made it fair game to talk to them about my
dad’s lawsuits or my mom’s charitable activities, you know, the questions,
were they doing things the right way. And so, we had great dinner-table
conversations and we had a comfort with talking to adults and knowing what
adults were up to.

WILLIAM GATES SR.: You have to understand that he had a point of view
about whether we were doing it the right way or not.

(LAUGHTER)

CHARLIE ROSE: What do you mean?

WILLIAM GATES SR.: Well, he matured early.

CHARLIE ROSE: Now, this -- your bedroom was in the basement at some
point?

BILL GATES JR.: That’s right.

CHARLIE ROSE: And he was in the basement, and his mother called down
and said -- you pick up the story.

WILLIAM GATES SR.: And said -- well, we were all standing around, the
two girls and Mary and I were standing around upstairs, waiting to get into
the car and go somewhere. And said, “Bill, what are you doing?” He said,
“I’m thinking, Mother. Don’t you ever think?”

And mother and I...

CHARLIE ROSE: You don’t say that to your mother.

(LAUGHTER)

WILLIAM GATES SR.: Well, Mother and I looked at each other on that
question, and looked at each other rather carefully and said, “You know,
I’m not sure we do.”

CHARLIE ROSE: There is also this, which is alluded to here. There
was a point in which somebody in the family thought it might be a good idea
if he had some counseling, yes? And after the counseling, the counselor or
whatever he was -- psychologist, psychiatrist.

BILL GATES JR.: Yes, psychiatrist.

CHARLIE ROSE: Said to your parents, give up?

(LAUGHTER)

BILL GATES JR.: Well, yes. He actually told me that, you know, my
parents were on my side, and it was a pretty important insight, that, you
know, fighting with your parents over things is just -- you know, that’s
really not where things are. And that happened early. So as I grew older,
I -- my parents were helping me, and I focussing my energy on the world at
large.

CHARLIE ROSE: Let me just give a different interpretation, if I may,
even though I wasn’t there.

BILL GATES JR.: OK, good, good.

CHARLIE ROSE: It was that he said to your parents, stop arguing with
him. He’ll never stop arguing, and he’ll always win in the end. Does that
ring true to you?

BILL GATES JR.: Well, yes, he said that I had this unfair advantage,
that, you know, they really cared about me and, you know, didn’t really
prove anything. I shouldn’t think of myself as benefiting from winning
some argument. And he really brought me around.

CHARLIE ROSE: Oh, so you changed?

BILL GATES JR.: I did change. I was a little bit nicer.

(LAUGHTER)

CHARLIE ROSE: A little bit nicer.

(CROSSTALK)

WILLIAM GATES SR.: Right on.

CHARLIE ROSE: Do you remember that moment, when he was a little bit
nicer?

WILLIAM GATES SR.: Well, I really do remember the advice from the
counselor, which was quite profound.

CHARLIE ROSE: What do you two disagree about?

BILL GATES JR.: I think my dad might give more sooner. You know, he
encouraged me to start the foundation while I was still working full-time
and, you know, for a few years I wasn’t sure that was right, but then with
him offering to help out, I absolutely did that, which I’m very glad I did.
And you know, he empathizes with the needs out there, and so it’s been a
very positive influence to push me to think with more humility and to do
more rapidly.

CHARLIE ROSE: It is often said that parents learn by watching -- that
children learn by watching their parents. But you say here, parents learn
by watching their children.

WILLIAM GATES SR.: I do say that, and I absolutely believe it. I
experienced it and I -- there are things about their mother and certainly
some things about me which I have learned from watching them. Our oldest
daughter is, for example, just meticulously confident about things. And
her...

CHARLIE ROSE: She’s the accountant?

WILLIAM GATES SR.: Pardon me?

CHARLIE ROSE: Is she the accountant?

WILLIAM GATES SR.: She’s the accountant, yes, yes. And it all fits.

(LAUGHTER)

WILLIAM GATES SR.: And she’s a terrific example of, you know, you
think about that when you’re confronted with choices, and you say, well, if
Christy were here, I guess that’s what I’m going to do.

CHARLIE ROSE: His mother had a passion for community service. Served
on the board of regents of the University of Washington.

WILLIAM GATES SR.: Yes.

CHARLIE ROSE: And United Way. What was that about?

WILLIAM GATES SR.: Well, to start with, it was genuine. I mean, she
believed in the value of community activity, and in addition to which,
which is just sort of tangential, she was also very good at it. So little
wonder that it was a very significant part -- significant part of her life.
It started from a very serious motivation about working on things that
could be made better.

CHARLIE ROSE: Do you remember when he first got interested in
computers?

WILLIAM GATES SR.: At this high school where Bill went to school,
there was this very, very beginning kind of computer, keyboard and a
teletype sort of a thing, but it was fascinating to him and some of his
classmates, and they spent hours fiddling with that thing and learning
about it, and ultimately, while he was still in high school, running
programs. He and those boys who he was in cohorts with actually did the
programming for the high school. They assigned teachers to classes and
kids to classes, and did the whole schedule for the high school, and in the
course of that, arranged which girls would be in the classes they would be
in, as a matter of fact -- as a matter of choice.

CHARLIE ROSE: There’s merit in that, isn’t there?

(CROSSTALK)

CHARLIE ROSE: Reflect on that for a moment. Because you -- Gladwell
writes about it. I think Paul Allen shared the passion with you at the
time and you two went off to do something important.

BILL GATES JR.: Yes, the school bought this device, and the teachers
found it a bit confusing, and lots of students clustered around. I was a
lot younger than most, but I had done well on some national math exams, so
people kind of challenged me to figure it out.

CHARLIE ROSE: Go ahead.

BILL GATES JR.: And after a few months, it winnowed down. Paul
Allen, who was two grades ahead of me, myself, and just a few others really
stuck with it, and we got basically addicted and kept learning more. So it
was a phenomenal opportunity. And then of course Paul later, you know, we
stick together, do a lot of things, and then he founds Microsoft with me.

CHARLIE ROSE: Addiction may be a mild term, might it not? I mean,
you once said to me you...

BILL GATES JR.: That’s true.

(LAUGHTER)

CHARLIE ROSE: It was maniacal. Is that the word?

BILL GATES JR.: No, if you’re engaged...

(CROSSTALK)

BILL GATES JR.: ... in something like that, you really learn a lot.
And we wanted to know how it worked and how to write software.

CHARLIE ROSE: You went to Harvard?

BILL GATES JR.: Briefly.

CHARLIE ROSE: Briefly.

BILL GATES JR.: Not long enough to get a degree, but it was nice
while I was there.

CHARLIE ROSE: Well, you promised your father you’ll eventually get
it, and in fact you did later. But let me just stay -- so you go to
Harvard, but you’re still maniacal about the computer and its
possibilities. Paul is in Albuquerque or somewhere by then, is he not?

BILL GATES JR.: Not yet.

CHARLIE ROSE: Not yet. OK, help me out.

WILLIAM GATES SR.: Paul was actually in Massachusetts as well,
working for...

BILL GATES JR.: Honeywell.

WILLIAM GATES SR.: ... Honeywell?

BILL GATES JR.: Yeah.

WILLIAM GATES SR.: And actually, it was there that the article came
out in “Popular Mechanics” about this company in Albuquerque, which had a -
- it actually was a kit for a desktop computer. And that Paul came running
over, as I understand the story, to Bill’s dormitory and said here it is,
here it is, Bill, here we go.

CHARLIE ROSE: What did he mean?

BILL GATES JR.: Well, Paul had spotted this computer on a chip, the
microprocessor, and we’d been talking about that for several years. And he
had encouraged me, hey, let’s start a company, let’s start a company.
Well, I was under some pressure to go to school and do -- you know, be
semi-normal. So he came back to Boston to keep convincing me we should do
it.

So actually when that computer showed up, we were excited, but we also
thought, wow, this is happening without us, because Paul and I had seen
that the combination of these chips and software could do something
amazing, and that’s why we immediately wrote some software and called up
that company, and they became our first customer.

CHARLIE ROSE: And then you ended up with Microsoft and Intel, and
then you were off to the races.

BILL GATES JR.: That’s right. When we did the first Basic, there was
no looking back. Even though I was on leave there, I did not return.

CHARLIE ROSE: All right. Remember that period for me, because here’s
your son who’s gone off to Harvard, and you thought he would at least
finish four years.

WILLIAM GATES SR.: Yes.

CHARLIE ROSE: You and Mrs. Gates...

WILLIAM GATES SR.: Mary. Yes.

CHARLIE ROSE: ... had high hopes for Bill.

WILLIAM GATES SR.: Yes.

CHARLIE ROSE: And he’s going to leave after one year.

WILLIAM GATES SR.: Well, actually, it wasn’t quite that. He was
taking a semester off, so we weren’t confronting the ultimate demise of
college education there. We -- he was going to take a semester off and go
to Albuquerque and help Paul work there, and then he would go back. And in
fact, he did take a semester off and go back. The second time after he was
back for a semester, I have got to go back to Albuquerque. Now we started
to get...

CHARLIE ROSE: Nervous.

WILLIAM GATES SR.: ... a little bit concerned, and he never did go
back.

CHARLIE ROSE: And how was Mrs. Gates handling that?

WILLIAM GATES SR.: I would characterize her as being more concerned
than I. She just -- she had a stronger view in her mind of this is one of
my children. My children graduate from college. My children graduate from
college. My boy is not going to graduate from college? Oh, my word!

CHARLIE ROSE: She died of breast cancer and did not get to see this
movement in which you’re asked to come back, deliver the commencement
speech and get an honorary degree. As you go up to the podium, you look to
your father and say? What did you say to your father?

BILL GATES JR.: I said...

(BEGIN VIDEO CLIP)

BILL GATES JR.: Dad, I always told you I’d come back and get my
degree.

(END VIDEO CLIP)

BILL GATES JR.: And that was a fun moment.

WILLIAM GATES SR.: Yes, it was. It was.

CHARLIE ROSE: If you look at that as a fun moment, suggest to me in
this relationship and in this business career, moving into philanthropy,
that had been sort of the signal moments for you and for the family.

BILL GATES JR.: Well, as the business got bigger, I got advice from
my dad. Going public was a key milestone that we sat around the living
room and talked a lot about. And I...

CHARLIE ROSE: Now, were you the lawyer for the firm, for Microsoft?

WILLIAM GATES SR.: The law firm in which I was a partner -- actually,
the managing partner -- was the law firm that represented him in this
offering.

CHARLIE ROSE: Right.

WILLIAM GATES SR.: I felt like it was wise for me to step back and
let others be the hands-on lawyers for the project.

CHARLIE ROSE: Just thought it was not a smart idea for father to be
representing son?

WILLIAM GATES SR.: Precisely. Precisely.

CHARLIE ROSE: OK, so going public is one idea.

BILL GATES JR.: That was a big, big milestone. You know, the
contract with IBM, then the break with IBM, and getting to be quite large,
deciding to step down as CEO. These are all things that I had a chance to
talk to my dad about before I decided, and then just now, a little less
than a year ago, actually moving to the foundation full-time.

And during all that, my dad’s encouraging me, hey, what about the
giving? When -- can you start sooner and do more? And as early as about
2000, my dad volunteered, and so we started a new relationship, which was
he was looking at the letters and helping gather the team that became the
foundation.

CHARLIE ROSE: I want to come back to the foundation, but I want to
stay with the idea of this relationship within this family.

This has to do with Warren Buffett. Mrs. Gates and you are having a
dinner party in Seattle.

A conversation with Michael Arrington, TechCrunch

Michael Arrington is here. He’s the founder and editor of TechCrunch,
one of the most widely read blogs in Silicon Valley. TechCrunch was
founded in 2005, and now has separate sites covering specific countries and
technologies. Arrington has also formed a country to develop a tablet
commuter primarily to use the Web. It is called the Crunchpad. I’m
pleased to have him back on this program. Welcome, sir.

MICHAEL ARRINGTON: Hello, Charlie.

CHARLIE ROSE: Google versus Microsoft. We now have Bing, their
search engine at Microsoft, and Chrome, which is going to be an operating
system, a browser and an operating system.

MICHAEL ARRINGTON: Yes, it’s fascinating, because you think of Google
as a search engine company, which most of the revenue is derived from
search marketing, and Microsoft as a sort of software company. Windows and
Office, that’s where they get a lot of their revenue. And yet these two
companies are competing head on, viciously, because Microsoft wants search
share. There’s so much money in it. So they’ve got Bing and they’re
trying to do things with Yahoo! And Google, I don’t know if they want --
if they want sort of revenue from Office and the operating system, but they
certainly want to take that revenue from Microsoft. So you have them with
Chrome OS and Google Docs competing directly with Windows and Office. And
they’re going at each other’s core businesses, and it’s fascinating to
watch.

CHARLIE ROSE: But do they really look to have great success in that?
Do they expect to take away a lot of Microsoft’s operating system?

MICHAEL ARRINGTON: If you listen to Eric Schmidt at Google, he seems
pretty serious, that they want -- they want to do innovative things in the
operating systems space.

I don’t know what their projections are around that, but...

CHARLIE ROSE: There was a story that Eric was the one resisting going
ahead with Chrome as an operating system.

MICHAEL ARRINGTON: Oh, I don’t know if he resisted or not, but he’s
certainly behind it now that it’s public. And they also have Android, of
course, the mobile phone operating system that is also based on Linux.

CHARLIE ROSE: There’s also Bing. So, Bing got very good notices.
People in the business, the Walt Mossbergs of the world.

MICHAEL ARRINGTON: Yes. Bing is a great search engine. They
launched it, what, two months ago now. And it’s a little too early to tell
what kind of market share gains they’ll have, if any, but it’s definitely a
great search engine.

One of the problems with search -- and all the guys who do search
testing will tell you this-- it doesn’t matter what the results look like
if you have a testing group sort of blind sampling. If you put the Google
logo on top and ask them what they think of the search results, they like
it more than they like it otherwise. And so Google just has the brand in
search, and it’s going to take a lot of time and a lot of money.

CHARLIE ROSE: And a lot of people have to say Bing was better.
Someone said to me this interesting point, that what Google sometimes
worries about if somehow Microsoft computers, PCs, wouldn’t take Google.
Does that make sense to you?

MICHAEL ARRINGTON: I think that Microsoft in the past has made
changes to Internet Explorer that stopped the gathering of information by
the browser -- by Web sites. The browser sort of puts up not a firewall,
but you can imagine something like that. I think that’s part of the reason
why Google decided to back Firefox so heavily and also to create their own
browser, to stop that from happening. But I think with Google...

CHARLIE ROSE: So, it wouldn’t be Explorer?

MICHAEL ARRINGTON: Yes. Right. And Explorer’s market share is
dropping.

But I think Google wants to get Microsoft out of the PC entirely. And
they’re offering alternatives across the board to Microsoft software, which
makes that battle so fascinating.

CHARLIE ROSE: Speak to me about mobile phones and mobile technology
and where are we?

MICHAEL ARRINGTON: We’re in an awesome place. I mean, think back. I
know you talk about the iPhone quite a bit. The iPhone changed --
absolutely changed the mobile landscape. And people said, you know, some
people said that Apple couldn’t do this, they won’t do it.

CHARLIE ROSE: Because they began to see it as a computer in itself?

MICHAEL ARRINGTON: Well, yes.

CHARLIE ROSE: That’s what...

MICHAEL ARRINGTON: Although not just that.

CHARLIE ROSE: And it looked good and everybody wanted to have one
because they thought it was so cool.

MICHAEL ARRINGTON: They also figured out Web surfing on a phone with
a small screen that’s a touch screen, but it’s small, but they figured out
the gestures to zoom in and out, and it’s actually an adequate Web surfing
experience that they figured out. No one else had done that before.

CHARLIE ROSE: And what about the Palm Pre?

MICHAEL ARRINGTON: It’s a great phone.

CHARLIE ROSE: It’s a great phone. Why is it a great phone?

MICHAEL ARRINGTON: The operating system I think is as good or in some
cases better than the iPhone. The operating system is quick, you can have
lots of apps open, it’s a great operating system.

The hardware on the phone I think was a little rushed and feels a
little cheap, so for me I’m sticking with the iPhone, but I came close to
choosing the Palm Pre, partially because of the physical keyboard. I think
it’s really nice, and also because I feel like I’m getting a little bit too
tied to Apple.

CHARLIE ROSE: OK. Tell me what Crunchpad is.

MICHAEL ARRINGTON: About a year ago -- and I really like where the
industry is going with this -- about a year ago, I realized I just want a
big iPhone. I want a computer that I can sit on the couch and surf the Web
without having a weird keyboard stuck to it that doesn’t really work when
you’re not sitting at a desk. And so we started this project on TechCrunch
just talking about it, saying we want to build this and we want help from
the community, and great things happened over the course of a year. We’ve
hired a team. We’ve had lots of people, partners come on board and
contribute their time, their resources, suggest partnerships.

CHARLIE ROSE: Did you go get venture money?

MICHAEL ARRINGTON: Well, you know, I’m not going to answer that
question.

CHARLIE ROSE: Why not?

MICHAEL ARRINGTON: Because I haven’t -- I don’t want to answer the
question.

(LAUGHTER)

CHARLIE ROSE: We have our ways, sir.

MICHAEL ARRINGTON: But I’ll say this. I think that Apple -- so
there’s rumors -- forgetting the Crunchpad and the fact that I want to
build that -- Apple is talking about coming out with a tablet computer,
which is going to be a large-screen iPod, or iPhone or iPod Touch. I think
that’s a good thing. I think they’ll sell a lot of them.

Google’s new operating system, Chrome OS, is a Linux-based operating
system with a browser on top, and the idea is you never see the operating
system. You never go to the desktop on the computer. It goes right to the
browser, which is what we’ve been talking about for a year. They’ve been
working on it for a long time. I’m not suggesting we had the idea first.
I have no idea. But the point is, it’s coming to market as a free
operating system. I think that’s really good, and we’re going to see
netbooks without keyboards. We’re going to see computers with other input
mechanisms besides keyboards, or alternative input mechanisms that I think
are going to -- really exciting stuff.

CHARLIE ROSE: Facebook versus Google. Is that a big competition?

MICHAEL ARRINGTON: You know, last time we talked, it was Facebook
versus MySpace. And the funny thing is, that’s not the question anyone
asks anymore.

CHARLIE ROSE: It’s what is Facebook becoming?

MICHAEL ARRINGTON: Right. And what is Google becoming. I think it’s
almost like everybody is chasing Twitter right now, and Facebook clearly
is. But when it comes down to it, the social aspect of Facebook, where
your friends are recommending things to you, which could be products or
news items, and it’s the constant sort of logging into the site 25 times a
day is something that Google needs to address. And right now they...

CHARLIE ROSE: So that’s Zuckerberg’s argument. Look, I mean, who
better to go for a search than your friends? If you know and trust.

MICHAEL ARRINGTON: Exactly. Exactly. Yes. Why not?

CHARLIE ROSE: Because they will know who you are and what you like.

MICHAEL ARRINGTON: Some of the startups that buy traffic on Google
search are talking about the conversion rates from those -- conversion
rates meaning a purchase or a signup that they get from that purchase
traffic from Google is good, but not nearly as good as the conversion rates
they are seeing from Facebook and Twitter. So if I just send out a link
saying, wow, I just saw this movie and it sure is good, and you click on
that, you’re more likely to go see the movie than you are if you do a
search for it and click on a paid ad from Google.

Google is very aware of that. The free stuff on Twitter and Facebook
is better than the paid ads on Google. And that has to be freaking them
out a little bit.

CHARLIE ROSE: So, what did you do? You published some internal
financial documents from Twitter?

MICHAEL ARRINGTON: There’s this hacker...

CHARLIE ROSE: I know that.

MICHAEL ARRINGTON: This French guy that got these documents from
Twitter because of these guest books (ph)...

CHARLIE ROSE: Right, and so what did you do?

MICHAEL ARRINGTON: I’ll get to it. He -- so what he did was, he
wanted to warn Twitter that, you know, your security is awful. And also he
wanted to get credit for doing this as hackers and crackers do. So, he
went to the French media, and a French journalist -- he was told about it,
this French journalist went to Twitter and said what happened, Twitter
wouldn’t respond. So he dropped it, came to us and said...

CHARLIE ROSE: Who came to you?

MICHAEL ARRINGTON: This hacker, anonymously, and said, here are all
the documents and sent us all these documents. Started this fascinating
discussion about...

CHARLIE ROSE: What was in the documents?

MICHAEL ARRINGTON: It was hundreds of documents taken from Twitter’s
employees’ attachments to e-mail accounts. And it included interview
schedules, people they interviewed in Silicon Valley, prominent people that
work in other companies that didn’t end up at Twitter. So very
embarrassing stuff. Credit card information for many of the employees. E-
mails, inbox screen shots, executive meeting notes, financial projections,
et cetera, et cetera, et cetera. Just the whole sort of thing. And we
looked at that and said, we’re going to post some of this. Some of it
we’re not. But we said...

CHARLIE ROSE: Like credit card numbers, you’re not going to post
that.

MICHAEL ARRINGTON: We’re not going to post the credit card numbers or
things that would embarrass people, but some of this was -- we thought was
pretty darn newsworthy, particularly the financial projections and the
executive meeting notes from the last few months. And so we engaged in a
dialogue with our readers, where we said, look, we have got these
documents. We haven’t decided yet what we’re going to post, we think a
couple of documents. We talked to Twitter, sent them all documents, so
they knew what was going on. Talked to our lawyer...

CHARLIE ROSE: So, what did they say, go ahead and post them?

(LAUGHTER)

MICHAEL ARRINGTON: They said...

CHARLIE ROSE: We have no problem with this?

MICHAEL ARRINGTON: The ultimate answer was, we know you’re going to
post a couple of these, and that’s OK, but for most of these, we’d really
rather you not, and so that’s not a problem, we absolutely won’t. And we
worked with Twitter on the back end to make sure they closed up some of the
security holes that they had. But the interesting thing to me wasn’t the -
- the documents were fascinating. The interesting thing to me was the
discussion that was generated around whether we should publish them or not.

And there are people that have come out, major journalists who have
come out said it was unethical for us to do this. And there were
journalists who had come out and said it was absolutely fine and ethical
for them to do this. In fact, their readers deserve that kind of access.

And obviously I have an opinion because I’m in the middle of the
story, but just taking myself out of it, I think it’s a fascinating
discussion, because I know in the old days, when "The New York Times" or
"The Wall Street Journal" got documents like this, they weren’t -- they
didn’t have that discussion with the readers.

CHARLIE ROSE: It’s interesting how you did it, you know, engaging
your community.

MICHAEL ARRINGTON: I engaged them, and I would say that 80 percent of
my readers disagreed with me. And let me know about it.

CHARLIE ROSE: So, why did you do it?

MICHAEL ARRINGTON: Because I think -- well, you know, it’s funny.
When I make decisions with TechCrunch on whether to publish or what
position to take, often I’ll look back after everything is played out and
say, would I do things differently with the benefit of hindsight? And
there are a couple of instances in the past where I would have probably
done things differently. In this case, I think I absolutely did the right
thing, and I wouldn’t do things any differently. So.

CHARLIE ROSE: Do you know the site called Looped (ph)? It’s amazing.

MICHAEL ARRINGTON: It’s this mobile social networking. And it’s all
about location.

CHARLIE ROSE: Wherever you are, you know everybody in your block.

MICHAEL ARRINGTON: Yes. I can turn mine on -- I mean, I don’t have
my phone with me, but I can turn it on when I get out of here and see
everyone around me who’s a friend. Actually, mine is set up a little
differently, so I’ll see everyone who wants me to see them. And it’s a
different way of networking socially.

I love it. In fact, I’ve written about this, where you can imagine a
time where you walk into a bar and you pull out your phone and you see --
for everyone that wants you to see it, you see -- and you laugh and it’s
funny, but it’s also big business. Everyone’s picture who’s the opposite
sex or whatever your sexual preferences are, who is single and maybe wants
to -- you can see all of them. And that way you know, you know, you can go
and flirt with them on the phone and it sort of helps you meet people in a
bar.

Or you go into a business cocktail setting, and you see people on your
phone that you’ve met before and maybe it helps you with their first name
or to remember things. I think that’s the kind of thing that Looped (ph)
and others are doing that is going to change social networking.

CHARLIE ROSE: So, tell me how you see the future of social
networking? I mean, is it...

MICHAEL ARRINGTON: I don’t know what it is. I mean, it’s hard to
define. It’s -- if you look at Facebook, it’s really the plumbing behind
the interactions online between people and helping them map to the real
world. It’s clear that people love interacting with each other on Web
sites. And it’s clear that Facebook has been able to get third parties to
build applications on their platform that leverage you having your friends
sort of seeing what you’re doing. And it’s clear also that they can then
take that -- if you saw what they did with CNN around the elections, and
then you can comment and your friends can see you comment, you know, what’s
going on during the election.

That’s all -- it’s sort of really fascinating. What’s unclear is
whether it can really become profitable over the long run. Because
Facebook has these massive expenses, and the revenues are growing rapidly,
but it’s unclear if in the long run, they can make that vastly profitable
like Google has.

CHARLIE ROSE: What about the Kindle space?

MICHAEL ARRINGTON: The ebook reader space is very interesting, and I
wouldn’t expect Apple to stay out of it for much longer, to be honest, but
Amazon has been successful in selling the Kindles. I think they -- the
estimates are they might sell a million or so this year. They sell lots of
books on top of it and subscriptions, so it’s a great revenue stream for
them.

I’ve argued that Amazon should not be building a hardware device
specifically. They should be building the software or the device and let
anyone build a Kindle if they want. These are forcing Sony and Barnes &
Noble and Apple and others to come up with their competing sort of closed-
off ebook systems. And so I think that Amazon should really say, look,
we’re going to do the books, we’re going to do the software for the Kindle,
but other people build the hardware.

CHARLIE ROSE: You take care of the hardware. Yes. TechCrunch, thank
you.

MICHAEL ARRINGTON: Thanks very much.

CHARLIE ROSE: Michael Arrington.

Thank you for joining us. See you next time.

END