Gates was 19 and had left Harvard; Allen was 22. Months earlier they had seen the Altair 8800, a kit computer from the Albuquerque firm MITS, on the cover of Popular Electronics and offered its maker a BASIC interpreter they had not yet written. Allen suggested the name "Micro-Soft", short for microcomputer software. The company moved to the Seattle area in 1979, and its operating system for the IBM PC made it the dominant software company of the personal-computer era.
In December 1974 Paul Allen bought the January 1975 issue of Popular Electronics, which featured the Altair 8800, a computer kit with no keyboard, no screen and no software. He showed it to his friend Bill Gates, and the two called MITS, the company that made it, claiming to have a version of BASIC that would run on it. They then wrote one in about eight weeks, using an emulator on a Harvard computer.
Allen flew to Albuquerque in February 1975 to demonstrate the program, which he had never tested on a real Altair. It worked on the first try. MITS agreed to distribute it, and Allen took a job there. On April 4, 1975, the two formally set up their partnership, with Gates holding the larger share. They wrote the name as "Micro-Soft"; the hyphen disappeared within a year.
In 1976 Gates published an "Open Letter to Hobbyists" complaining that most users of Altair BASIC had copied it without paying. The deal that transformed the company came in 1980, when IBM asked Microsoft to supply the operating system for its first personal computer.
Key people: Bill Gates, Paul Allen