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February 9, 1988

ASCII CORP’s KAY NISHI EXPLAINS RIFT WITH MICROSOFT, REVEALS KISS-&-MAKE-UP MEETING

By CBR Staff Writer

Kazuhiko – Kay – Nishi finally went public last Friday on the background to his spectacular bust-up with Microsoft Corp and its founder, Bill Gates, Anita Byrnes reports from Tokyo. The 31 year old president of ASCII Corp, which was Microsoft’s representative in Japan until the break, revealed that he and Gates had not spoken between the ending of their seven-year partnership until the other week, when Gates visited Japan. They had a seven-hour meeting and agreed to be friends again. The break evidently stemmed from the different directions which the two men wanted to pursue – Gates wanted to remain a specialist software company, while Nishi at that time was very interested in semiconductors and also wanted to pursue his publishing interests and diversification into hardware. Indeed Gates wanted to buy the software division of ASCII and although Nishi himself was willing, his financial partners vetoed the sale. ASCII now has 500 employees and has annual sales of 170m, and will shortly move into its own building. Nishi is enthusiastic about new projects coming along, which include software broadcasting via satellite (ASCII has reserved a transponder on a satellite), a pencil portable phone that initially will work only within a building but later will be extended to outside; a portable copying machine; and a magnetic card developed in conjunction with NEC which enables phone calls to be transferred to any phone into which the card is inserted. Nishi was asked about the AX project to create a 16-bit standard around the hardware and software of IBM’s Personal AT. His participation is as a chip supplier only, and he was somewhat sceptical about the future of the project because the majors like Fujitsu and Hitachi are still sitting on the fence. He also felt that software developed for the Japanese market to run on IBM AT would not necessarily be popular, because of the need to be Japanese and reflect Japanese culture. On the subject of Tron, Japan’s white hope for the portable 32-bit operating system market, he didn’t want to say anything damning but despite its clean architecture and originality, of which he approved, he was only a silent supporter because of the need to retain compatibility with existing hardware and software. Asked whether any creative software was likely to come out of Japan, he cited image processing.

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