Paul Allen: Living In Gates' Shadow -- A `Nice-Guy' Billionaire, Visionary, He's Making Many Deals Of His Own

Microsoft co-founder Paul Allen must wonder sometimes what it takes to get a little respect.

He has plenty of money: With more than $3 billion in Microsoft stock, $300 million in TicketMaster and hundreds of millions more in his own and other technology companies, Allen was listed 13th in a recent Forbes magazine ranking of American family wealth. He also owns the Portland Trail Blazers basketball team.

He's well-liked: Everyone associated with the bearded, teddy-bearish 41-year-old calls him a genuinely nice guy - the billionaire next door.

He's a visionary: Allen was involved in most of the products that carried Microsoft to the top, including BASIC, MS-DOS, Windows, Word, Excel and Macintosh software. Two years before "information superhighway" gained cliche status, Allen coined his own term, "Wired World," to describe an electronically linked society. He promotes synergy among his various investments, which include wireless, networking, biotech, on-line and software companies.

What Allen can't seem to do is elude the enveloping shadow of his boyhood pal.

"While his old partner Bill Gates is brilliant at picking strong, creative executives and delegating to them, Allen lacks that knack," Forbes magazine assayed last month.

"No one has ever accused him of having Gates's killer financial instincts, or his lust to win," WIRED magazine reported in its August issue.

Yet a cover story in Fortune magazine concluded, "It's hard to find anyone who knows much about Allen and his ventures who has any cogent criticism of the man."

In another part of the country, in another business besides software, Allen would have little trouble establishing himself as a certifiable success, if not local hero. He's given millions to charity, loaned $20 million to the Seattle Commons project, financed a $10 million library at the University of Washington. On paper, his investments at the end of 1993 were worth $275 million more than at the beginning of the year.

So aggressive is Gates at promoting his own accomplishments, however, that Allen's contributions to his friend's and Microsoft's successes often are overlooked. And critics expect him to have pulled off another Microsoft miracle by now, even though most of his companies are involved in technologies with little immediate payback potential.

His privately held, Bellevue-based software company, Asymetrix, founded in 1985, has yet to turn a profit, doubters point out. Multimillion-dollar investments in Kent-based SkyPix, a satellite TV-broadcast company, and Redmond's Virtual Vision, which makes headgear capable of showing TV and movies, fizzled in bankruptcies. Allen-backed SureFind, a Seattle-based telephone-classified-advertising service, recently underwent a management shake-up and redirection.

Like most Allen investments, each had pioneering technology but an uncertain customer base. They may in fact have simply been ahead of their time.

"When you're involved in as many things as I am, you're going to have some things turn out great, some things that are OK and some that don't turn out like you expect them to," Allen said recently.

As for "mean-spirited" attacks on his management and investment styles, the unperturbed Allen said, "You kind of scratch your head and say, `Wow, why doesn't this person understand what I'm trying to do?' "

Through Microsoft, Gates - like Allen - is pouring hundreds of millions into a number of information-superhighway technologies. Most prominent is a system called Tiger, designed to turn powerful networked personal computers into interactive televisions, capable of receiving movies and a host of financial, entertainment and education services on demand.

Like Allen's, it will be years before Gates' gambles prove out. In the meantime, the Gates refrain probably will play over and over.

"Every time I hear Paul compared to Bill Gates, I just cringe," said Sonja Carson, a software recruiter who helped bring talent to Asymetrix. Carson, who calls Allen "more interesting" because of his wide-ranging interests in music, sports and interactive media, added, "I don't think he's even interested in being another Bill Gates."

Allen isn't alone in finding himself on the dark side of the Gatesian supernova. Not long after Allen - recovering from Hodgkin's disease - left Microsoft in 1983, Gates' handlers initiated a national media campaign that culminated with his horn-rimmed boy-nerd image on the cover of TIME magazine.

Gates since has become personal computing's leading celebrity. A recent Fortune cover story on Oracle's Larry Ellison called him "Software's Other Billionaire" - a reference to Gates that ignored Allen.

Allen seems unbothered. Apart from leaving Microsoft, he has shown little interest in disassociating himself from his Lakeside School chum. At Gates' invitation Allen rejoined the Microsoft board in 1990. The two attend NBA basketball games together frequently in Seattle and Portland, and recently made a joint $10 million investment in Darwin Molecular, a Seattle biopharmaceutical firm that researches therapies for AIDS and cancer.

"Obviously I have a significant interest in having Microsoft continue (to) do well, but I think there's huge opportunities to do things in areas that may not overlap with Microsoft," Allen said.

Does he feel schizoid, being both investor and competitor? "Occasionally there's some overlap or even large overlap, but I deal with those when they come" - usually by sitting down with Gates.

Allen is showing signs of coming out of his Microsoft shell. Through most of the 1980s, the shy, intensely private techno-tinkerer kept to himself, granting almost no interviews. Since 1990, his primary public appearances have been for Asymetrix.

The most recent, earlier this month at a programmers conference in Seattle, occasioned an update of his vision of a "Wired World" - the information superhighway, Paul Allen-style.

Speaking to a gathering of 300, Allen ran through a litany of software opportunities, including CD-ROM, on-line multimedia and, eventually, interactive services, on the information superhighway. At each stop, he brought into play another of the more than a dozen companies he is involved with.

"You can see a scenario where everyone is basically on line with digital channels to home and business," Allen said. Movies on demand, video pen pals, instant polling, three-dimensional video, intelligent-software "agents" to track down information and new forms for advertising are among the more compelling applications, he said.

"Everybody's trying to figure out which technology is going to win, and when they do they'll deploy it pretty rapidly," he said - perhaps by the turn of the century.

Unlike John Malone of TCI, QVC's Barry Diller and Gates, Allen seems more interested in filling the lanes than owning parts of the highway.

His 110-employee Starwave is putting together deals aimed at supplying different on-line markets. Earlier this year it partnered with Sports Team Analysis & Tracking Systems Inc. - STATS - to distribute sports information electronically, and with Outside magazine in hopes of offering outdoor-sports information on line.

Deals with Jim Henson Productions, the Muppets marketers, to form Jim Henson Interactive and publish games on CD-ROM, and with Clint Eastwood to develop a multimedia CD-ROM based on Eastwood's career, soon followed.

On the rock-music scene, Interval Research Corp., Allen's Palo Alto, Calif.-based think tank employing 60 researchers, has put together an electronic carnival for the 43-city Lollapalooza rock tour this summer.

With America Online, a commercial information service he backed early with hopes of purchasing, Allen would have had his own highway to carry sports, rock and whatever else amused him into the computerized homes of millions worldwide. Allen accumulated a 24.9 percent stake two years ago but was rebuffed by a corporate provision limiting his stock ownership. Recently, he sold more than half his remaining share in the company - 733,000 shares at a $30.7 million profit.

Absent America Online, Allen is pursuing ventures with Ziff-Davis' Interactive Interchange Online Network and Microsoft's expected on-line service (code-named Marvel), as well as aboard the Internet.

What is emerging in the Allen of the mid-1990s is an in-the-flesh mating of the Information Age and Renaissance. Allen's eclectic interests -and investments - are rare among ego-driven software kingpins preaching focus, focus, focus and market domination. But Allen's approach - of a diverse lifestyle balancing business, hobbies and leisure - better reflects the trend away from the money-mad '80s to the personal-fulfillment issues of the '90s.

Allen may never escape the Gates aura, but he leaves no doubt he is happy with his life's path.

"Trying to set up your own company and take on a different area is a whole different ballgame than Microsoft," he said. "If I'd stayed at Microsoft, I don't know that I'd had these broad experiences. Bill loves being the guy in charge there, and I've enjoyed the things I've done since I left.

"I have no regrets."

-------------------------------- WIRED WORLD: ALLEN'S INVESTMENTS --------------------------------

TECHNOLOGY/BUSINESS

United States Satellite Broadcasting (July 1994): Allen invested "many millions" in the St. Paul, Minn.-based affiliate of broadcast giant Hubbard, which has invested heavily in digital-broadcast technology.

Darwin Molecular (May 1994): Allen and Bill Gates invested $5 million each in the Bothell biopharmaceutical company specializing in AIDS and cancer research.

ARI Network Services (May 1994): Allen invested $1.8 million in the Milwaukee company. ARI offers electronic ordering and billing that may come into play as companies advertise and market more on the Internet.

Nationwide Wireless Network (March 1994): Allen and Gates have both put $10 million in the network, which specializes in wireless-data transmission.

Cardinal Technologies (October 1993): Allen invested $15 million for less than 20 percent of the Lancaster, Pa.-based company, which specializes in multimedia upgrades for personal computers.

Metricom (October 1993): Allen purchased 1.2 million shares for $17.5 million in the Los Gatos, Calif., company specializing in local, low-powered, inexpensive wireless-computer networks.

Harbinger-EDI (August 1993): The Atlanta-based company specializes in Electronic Data Interchange, an on-line method of exchanging form-based data among banks and corporations. Allen bought in for an undisclosed sum reported at 20 percent of the privately held company.

Starwave (August 1992): Allen formed the Bellevue start-up to explore on-line multimedia opportunities.

SureFind (August 1992): Allen's undisclosed investment came when SureFind was aiming for a national market in telephone classified ads, specializing in real-estate and used-auto sales. The market hasn't materialized, but SureFind's data-handling technology is still advancing.

Telescan (May 1992): Allen paid $2.8 million for a 14.6 percent share in the Houston-based financial on-line service.

America Online (March 1992): Allen poured $30 million into the trendy information service when it was relatively unknown. Blocked from purchasing a majority interest, he scaled back his holdings to 9 percent.

Interval Research Corp. (March 1992): Allen expects to spend $100 million in research at the Palo Alto, Calif.-based think tank.

Egghead Software (June 1986): Egghead, based in Issaquah, has had more ups and downs than Humpty Dumpty. Allen's stake has varied and today stands at 7.4 percent, worth $8.2 million.

Asymetrix (January 1985): Employing 270 people, Bellevue-based Asymetrix develops ToolBook, a Windows programming tool, a computer-screen saver called Jurassic Park, and other consumer software. Allen said a "slew" of new products is coming from Asymetrix in the fall.

MUSIC/ARTS

TicketMaster (November 1993): Allen purchased 80 percent of the Santa Monica, Calif., ticket company, paying more than $300 million.

Lone Wolf (June 1993): The company, which moved to Seattle from Redondo Beach, Calif., after Allen's undisclosed investment, makes software linking music instruments, audio and audiovisual equipment, and computers. Some potential for home and amateur musician adaptation.

Jimi Hendrix Museum (September 1992): Cost of the museum is undisclosed but expected to exceed $20 million. The initial target opening date in 1994 has been moved back to 1996 or beyond. Potential sites are under consideration in downtown, Seattle Center and the International District.

SPORTS

Portland Trail Blazers (May 1988): Allen paid $75 million for the team and is putting up $46 million to build a new arena with interactive multimedia kiosks in Portland.

STATS - Sports Team Analysis & Tracking System - (April 1994): Allen bought a small undisclosed part of the Skokie, Ill., company, a numbers cruncher for professional teams and sports media.