After reading the January 1975 issue of Popular Electronics that demonstrated the Altair 8800, Bill Gates contacted Micro Instrumentation and Telemetry Systems (MITS), the creators of the new microcomputer, to inform them that he and others were working on a BASIC interpreter for the platform. In reality, Bill Gates and Paul Allen did not have an Altair and had not written code for it; they merely wanted to gauge MITS's interest. MITS president Ed Roberts agreed to meet them for a demo, and over the course of a few weeks they developed an Altair emulator that ran on a minicomputer, and then the BASIC interpreter. The demonstration, held at MITS's offices in Albuquerque was a success and resulted in a deal with MITS to distribute the interpreter as Altair BASIC. Paul Allen was hired into MITS, and Bill Gates took a leave of absence from Harvard to work with Paul Allen at MITS in Albuquerque in November 1975. They named their partnership "Micro-Soft" and had their first office located in Albuquerque. Within a year, the hyphen was dropped, and on November 26, 1976, the trade name "Microsoft" was registered with the Office of the Secretary of the State of New Mexico. Gates never returned to Harvard to complete his studies.
Microsoft's BASIC was popular with computer hobbyists, but Bill Gates discovered that a pre-market copy had leaked into the community and was being widely copied and distributed. In February 1976, Bill Gates wrote an Open Letter to Hobbyists in the MITS newsletter saying that MITS could not continue to produce, distribute, and maintain high-quality software without payment. This letter was unpopular with many computer hobbyists, but Bill Gates persisted in his belief that software developers should be able to demand payment. Microsoft became independent of MITS in late 1976, and it continued to develop programming language software for various systems. The company moved from Albuquerque to its new home in Bellevue, Washington on January 1, 1979.
During Microsoft's early years, all employees had broad responsibility for the company's business. Bill Gates oversaw the business details, but continued to write code as well. In the first five years, Bill Gates personally reviewed every line of code the company shipped, and often rewrote parts of it as he saw fit.
Bill Gates did not offer to transfer the copyright on the operating system, because he believed that other hardware vendors would clone IBM's system. They did, and the sales of MS-DOS made Microsoft a major player in the industry. Despite IBM's name on the operating system the press quickly identified Microsoft as being very influential on the new computer, with PC Magazine asking if Bill Gates were "The Man Behind The Machine?" He oversaw Microsoft's company restructuring on June 25, 1981, which re-incorporated the company in Washington state and made Bill Gates President of Microsoft and the Chairman of the Board.
Microsoft launched its first retail version of Microsoft Windows on November 20, 1985, and in August, the company struck a deal with IBM to develop a separate operating system called OS/2. Although the two companies successfully developed the first version of the new system, mounting creative differences caused the partnership to deteriorate.
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