Bill Gates and Paul Allen form partnership called Micro-Soft

While at Harvard, he met his future business partner, Steve Ballmer, whom he later appointed as CEO of Microsoft.

He also met computer scientist Christos Papadimitriou at Harvard, with whom he collaborated on a paper about pancake sorting. He did not have a definite study plan while a student at Harvard and spent a lot of time using the school's computers. He remained in contact with Paul Allen, joining him at Honeywell during the summer of 1974. The following year saw the release of the MITS Altair 8800 based on the Intel 8080 CPU, and Gates and Allen saw this as the opportunity to start their own computer software company. He had talked this decision over with his parents, who were supportive of him after seeing how much Gates wanted to start a company.

After reading the January 1975 issue of Popular Electronics that demonstrated the Altair 8800, 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, Gates and 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 Gates took a leave of absence from Harvard to work with Allen at MITS in Albuquerque in November 1975. They named their partnership "Micro-Soft" and had their first office located in Albuquerque.

Microsoft was formed soon after the introduction of the Micro Instrumentation and Telemetry Systems (MITS) Altair, the first "personal computer," a build-it-yourself kit for hobbyists. Bill Gates and Paul Allen seized the opportunity to transform this early PC into a breakthrough -- the Altair needed software, a programming language that could make it perform useful computing tasks. That's when it all began.

Allen, employed by Honeywell, and his friend, Gates, a sophomore at Harvard, immediately set out to adapt the first personal computer language for the Altair, called BASIC. They worked in marathon 24-hour sessions to complete a working product, which was then licensed to MITS. Soon thereafter, Allen accepted a position with MITS as director of Software Development, and Gates followed him later that year to form an informal partnership called Micro-Soft, complete with hyphen.

Over the years, the PC has transformed from a hobbyist's toy to an indispensable tool that continues to change the world. It has revolutionized how we deal with information, how we communicate, and how we work, learn and play.

Following is an overview of significant events that shaped the company in 1975.
The Year in Summary
Revenues: $16,005
Employees: 3 (Allen, Gates and Ric Weiland)

MITS promotes Altair BASIC, the computer language developed by Gates and Allen for the Altair computer. Hobbyists are ecstatic, despite the fact that, even with BASIC, there is little you can actually do with the Altair.

Company Events
- The MITS Altair 8800 appears on the cover of Popular Electronics. The article inspires Paul Allen and Bill Gates to develop a BASIC Interpreter for the Altair.
- Bill Gates and Paul Allen complete BASIC and license it to their first customer, MITS of Albuquerque, N.M., the manufacturer of the Altair 8800 personal computer. This is the first computer language program written for a personal computer.
- Paul Allen joins MITS as director of Software Development.
- The MITS Altair newsletter, Computer Notes, declares, "Altair BASIC -- Up and Running."
- Gates and Allen's BASIC officially ships as version 2.0 in both 4K and 8K editions.
- Allen and Gates sign a licensing agreement with MITS regarding the BASIC Interpreter.
- In a letter to Allen, Gates uses the name "Micro-Soft" to refer to their partnership.