Gates’ Pal Just Wants To Have Fun ‘Accidental Zillionaire’ Paul Allen Is No Scrooge, Spreads Wealth Around
Growing up in middle-class comfort in Seattle, Paul G. Allen fell in love with books, basketball and the electric guitar. Now, as one of the world’s richest men, he is responsible for a stunning new university library, owns a professional basketball team and arena that are redefining spectator sports, and is donating nearly $60 million for a museum that will be an homage to the guitar licks of Jimi Hendrix.
One can only imagine what natural history museums might be like if young Paul had played with bugs.
Since coming into one of the greatest fortunes in American capitalism at Microsoft, which he co-founded just 20 years ago, Allen has attracted wide interest for the way he is spending - and giving away - much of his original bankroll.
Among his generation of computer tycoons, Allen is one of the few who seem to be trying to get a life, as they say here in the Silicon Forest around Seattle.
Allen may well be, as Wired Magazine said last year, the accidental zillionaire. Dressed in comfortable casuals, pudgy and bearded, he looks like a community college professor on an off-plaid day. And if there’s a pattern to his seemingly scattershot dispensing of cash, it may be hard to discern.
He wants to have fun with his money, he said - to invest in research and technology that could change day-to-day life, and to make a lasting impact.
Already, he has given away more than $100 million, for libraries, AIDS research, theater, museums, parks, and the study of extraterrestrial life.
He has also invested more than $1.2 billion, buying 80 percent of Ticketmaster, the ticket vendor, and backing more than two dozen new companies, most of them in new technology - many of them risky investments that curl the cuffs of some financial advisers.
By some estimates, Allen has lost nearly $100 million in Asymetrix, the first software company he started after leaving Microsoft. But consider that in the last year alone, the value of his stake in Microsoft has nearly doubled, going up by more than $2.5 billion.
As the second-largest shareholder in Microsoft, which he co-founded with his grade school friend Bill Gates, Allen is worth $6.5 billion - about $5.5 billion in Microsoft stock - according to his financial manager, William D. Savoy. He owns 55.7 million shares of the world’s largest software company (Gates has nearly twice that), and he remains a director.
“There’s just so much money,” said Allen, smiling and shrugging during an interview in Bellevue, the Seattle suburb from which he runs an empire of new technology firms, investments, and philanthropy. “Whatever kind of material thing you’re interested in you could buy - crazy cars, boats, whatever. Sometimes that can be exciting. On the other hand, if the battery in your expensive car dies, it still won’t go anywhere.”
Maybe it was the cancer scare in 1982, a year before he left Microsoft, that made Allen’s approach to money so different from that of Gates, who plans to wait several years before assuming a “philanthropic mode.”
Allen, at 42, is not waiting for gray hairs and honorary degrees.
Basketball is one of his passions. Mention the possibility that his Portland Trailblazers may win an NBA championship and he almost starts his own wave.
Last spring, he invested $500 million in Dreamworks SKG, the new studio headed by Steven Spielberg, Jeffrey Katzenberg and David Geffen. Allen may never get a decent return on his money, some analysts say. But, again, it does not seem to matter to him.
Allen lives alone on a six-acre waterfront compound on Mercer Island, an enclave of old Seattle wealth and nouveau cyber-millionaires. The compound has become something of a big-boy sandbox for Allen - 20-seat theater, video screens in different rooms, indoor tennis court, pool, waterfall, and a skylit, regulation-size basketball gym.
He has a private jet, which he uses to dash off on diving excursions in tropical waters, and a 150-foot yacht. But he does not seem to revel in his toys the way, say, the late Malcolm Forbes did.
Allen seems more like the Tom Hanks boy-in-a-man’s-body character in the movie “Big,” said David Coursey, editor of P.C. Letter, an industry newsletter published in San Mateo, Calif. “I don’t think a venture capitalist would be happy with his portfolio,” he added. “But so what? He seems to be having fun.”
To Allen’s critics, the vast fortune is a fluke, a result of hitching his star to Gates. Paul is two years older than Bill; they hooked up at middle school when a clunky teletype-like computer was brought into Lakeside, a Seattle private school.
Paul dropped out of Washington State University to work for Honeywell, in Boston. There he again linked up with Gates, who was attending Harvard. The rest is computer history.
The pair started Microsoft 20 years ago this month, combining shrewd business practices and dogged programming genius with strokes of great luck. Allen had the programming brains, Gates the financial savvy.
It was Paul, in 1977, who said he expected the personal computer to become as much a part of everyday life as a telephone, and who envisioned things like E-mail and suggested the name Microsoft.
In 1982, Allen discovered lumps in his neck, soon diagnosed as Hodgkins Disease. He beat it with months of radiation therapy, emerging a changed man. “You realize life is short,” he said. “Facing your own mortality forces you to re-evaluate your priorities.”
In 1983, Allen - against his partner’s wishes - left Microsoft three years before it went public. The two remain close, though; they plan to vacation together this year.
Allen seems to realize that lightning, in the form of Microsoft’s great stroke, will never strike twice. He says he would be happy with at least one more “mid-level success.”
Thus, he remains more than willing to back hundreds of ideas with cash from that one monumental windfall. If some fail, or take years to bear fruit, he will not lose any sleep, he says.
MEMO: This sidebar appeared with the story: PROFILE Paul Allen, Microsoft co-founder, Portland Trail Blazers owner.