NEWSWEEK: Were you surprised that Judge Jackson seemed to side so consistently with the government? GATES: Certainly we were disappointed at some of the findings. [But] you could say that intelligent observers expected the judge to be more on the Netscape side than the Microsoft side.

But did you expect it? I certainly have a lot of faith in the American legal system. If we hadn’t put great Internet support into Windows, there would have been something wrong. The question is, what was the consumer benefit in what we did, and are we to be allowed to continue to innovate?

What about a scheme we’ve heard about that forces you to give up proprietary control of all previous versions of Windows, in exchange for being able to do whatever you wanted with future versions? I don’t think speculating about specifics of the settlement talk is either appropriate or fruitful. We come into work every day, thinking about doing great software. If we had this case behind us, that would be a good thing. Also, if a consumer buys Windows, they have to know that it’s really Windows, that the user interface is what they’ve been trained on, what it says in the manual, what they have on their other Windows machines. The product has to have a certain integrity. Those rules of the game are so clear… these things are allowed for any company. Anything against those things is just trying to change the rules in a way that’s clearly bad for consumers.

Why would it be bad for consumers if Microsoft broke up, either by legal forces or voluntarily? I don’t understand why that question comes up. If there’s a company that’s still developing Windows, that company, to be viable at all, will need to add features to Windows. If consumers are saying the Internet is the most important thing, that company will do exactly what we did with the browser. So our actions are a hundred percent within the rules.

An appeal will take years. Is that too long for this cloud to hang over you? The importance of our being able to improve Windows for consumers is something that speaks to our heart and soul. Certainly to preserve that principle, if it’s necessary, we’ll go through more steps in the process. Having said that, we’d like nothing more than to move on, as long as that principle remains intact.

Considering how strongly you feel, would you ever admit you were wrong as part of a settlement? If you could say, “OK, there’s just this one thing that’s been done wrong,” my gosh, we’ll go and change that. I would love nothing more than to do that. But there’s only one thing that really happened. Only one thing. And that is that we improved Windows. Boy, that was good for consumers. There’s no other way of looking at it.

What have you heard from other people in the business in the last few days? There are competitors who want a crutch, and certainly I haven’t had any dialogue with them. The response from employees and partner companies is that the way that we’ve improved our products has been a fantastic thing. And the desire of anyone I’ve spoken to to have the government come in and say, “Yes, you can do this feature” or “No, you can’t do that feature” is absolutely zero.

Before the judge ruled, you were on one of your Think Weeks. Any new ideas? I do two of those a year; I still take two cardboard boxes-full of Ph.D. theses, product ideas, product specs, articles, books. And yeah, I was thinking. And then towards the end, mostly writing: what does our wireless strategy look like? What does our communications strategy look like? What is the future of meetings in business? Will people have a lot fewer? Will they take the tablet machine in? How will they share notes and information? I wrote a pretty long memo.