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American Tycoons

Tycoon. The word comes from Japan, where it means the equivalent of shogun. But long ago America confiscated the title. It was in the U.S. that tycoons became paragons of power and influence. American tycoons swung deals, not swords, and changed the

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Born in 1955 in Seattle, Gates grew up in a large home, the son of a successful lawyer. He wrote his first computer program, a clunky tic-tac-toe game, at age 13, and bonded with fellow computer whiz Paul Allen, later Microsoft's cofounder, over a prehistoric computer, which lacked a screen. All that devotion to poker and computers seemed to leave Gates little room to ponder everyday life.
Steven Ballmer, a college buddy who became Microsoft's president (and recently chief executive officer), once said that Gates never put sheets on his bed, and once left for vacation with the windows and door to his room wide open. And it was raining. Business focus has never been a problem.
Gates is a driven boss, known for shouting "That's the stupidest thing I've ever heard" at an unsavory idea. But the rewards of working for Gates are undeniable. Allen is the third richest man in America ($30 billion), according to Forbes, and Ballmer ($19.5 billion) is No. 4. An estimated 2,500 past and present Microsoft employees are millionaires. Gates has long worried about the long-term success of his company.
"Success is a lousy teacher," he wrote in his 1995 book The Road Ahead. "It seduces smart people into thinking they can't lose." Losing now looks possible--in November a judge found that the company's near monopoly harms consumers. Microsoft could go the way of Ma Bell, but Wall Street hasn't slammed the company's stock, which still trades high.--David Savona
On August 7, 1996, the power went out for more than 6 million America Online subscribers. For nearly 19 hours, customers were cut off from e-mails, the Internet and other interactive offerings provided by the world's biggest online service. A few years earlier, such an outage would have drawn scant attention. But by 1996, the new communications medium had begun to rival the telephone as a way to keep in touch.
"If AOL five years ago had been inaccessible for a weekend, nobody would have known or cared," CEO Steve Case would spin-doctor the cataclysm to The Washington Post the following year. "We were like a little hobby people played with. Suddenly now we were more part of the everyday life." The little company has grown into an Internet powerhouse almost overnight.
Case has led AOL on a buying binge the past few years, acquiring such companies as Netscape Communications, Hughes Electronics and But the deal that rocked the media and online worlds came this January, when AOL agreed to purchase Time Warner, the entertainment, publishing and cable behemoth, for a record $165 billion. Just as radio and television transformed earlier eras, online communications has become an indispensable part of modern life.
Under Case, a shy, low-key executive who often wears khakis, AOL has grown to more than 20 million members worldwide, with annual revenues approaching $900 million and e-mail traffic equaling 80 million a day. In spite of well-publicized access and pricing problems, the online service has grown to control more than half of the U.S. home market. When Case attended Williams College in the late 1970s, his least favorite subject was computer programming.
But he was intrigued by the ability of the college's computers to talk to computers in far-off places, and he envisioned a time when computers would facilitate human interaction. Case eventually became involved with a start-up company called Control Video Corp., which struggled unsuccessfully to sell Atari video games for PCs. Rising quickly through the ranks in the '80s, he made deals for the company, now known as Quantum Computer Services, to develop online services for Apple, Tandy and IBM. I
n 1991 Case was named president and CEO of the company, which he had renamed America Online. He persuaded the board to resist the advances of Bill Gates, who wanted to buy the company as an inroad into the Internet world. After a direct mail campaign put 250 million diskettes into consumers' hands, AOL's membership exploded in 1994. Two years later, AOL usurped Prodigy and CompuServe (it would buy the latter the following year) as the online services leader.-- Bruce Goldman
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