Microsoft Corporation, leading American computer software company. Microsoft was founded in 1975 by Bill Gates and Paul Allen. The pair had teamed up in high school through their hobby of programming on the PDP-10 computer from the Digital Equipment Corporation. In 1975 they collaborated on the first version of the BASIC programming language for the Altair, the first personal computer. This led to the formation of Microsoft in Albuquerque, New Mexico, in the same year. In 1979 Gates and Allen moved the company to Redmond, Washington State, a suburb of their hometown of Seattle. Allen resigned in 1983 for health reasons, but has since rejoined the board of directors. Microsoft grew from 15 employees and US$500,000 in revenues in 1978 to over 39,000 employees and US$25.3 billion in revenues for the fiscal year ending in June 2001. In 1981 Microsoft took its first step in diversifying beyond the programming languages market when it released MS-DOS, the operating system for the first personal computer made by IBM, the IBM PC. Other manufacturers of PC-compatible computers were permitted to use MS-DOS under licence, and it became the software standard for such machines. Microsoft’s collaboration with IBM throughout the 1980s created the world’s first mass-market phenomenon in the computer industry based on the availability and mutual compatibility of computer chips, other hardware, and the MS-DOS operating system. The acceptance of MS-DOS as a software standard for the PC industry led to Microsoft’s increasingly important role in the industry. In 1991 Microsoft and IBM ended a decade of collaboration when they went separate ways on the next generation of operating systems for personal computers. IBM chose to pursue the OS/2 operating system, which had originated as a joint venture with Microsoft, while Microsoft chose to develop its Windows graphical operating system for IBM-compatible personal computers. Microsoft announced Windows 3.0 in 1990, followed by Windows 3.1 in 1992. Windows NT, an operating system for business environments, was released in 1993. In August 1995 the Windows 95 operating system was released. An estimated 7 million copies of Windows 95 were sold throughout the world within two months of its release. Another important part of Microsoft’s operation has been its application software business. In 1984 Microsoft was one of the few established software companies to develop application software for the first Apple Macintosh personal computer. Microsoft’s products for that machine enjoyed enormous success. Later, Microsoft’s experience with graphical applications for the Macintosh led to success with Windows applications such as the Excel spreadsheet and the Word word-processing program. Today these applications are designed to behave similarly on both Macintosh and Windows machines. See Graphical User Interface. Other product areas include local area network systems, which link computers, and hardware such as specialized keyboards and mouse pointing devices. Microsoft has also expanded into publishing, with a company called Microsoft Press, into database software, with products including Microsoft Access and Fox Pro, and into multimedia, with CD-ROMs that range from children’s products to reference material. In a rapidly expanding software market, Microsoft has been subject to allegations of monopolistic business practices. In the United States in 1990 the Federal Trade Commission (FTC) began investigating Microsoft for alleged anti-competitive practices, but was unable to reach a decision and dropped the case. The Justice Department continued the probe, which resulted in an agreement in 1994 that called for Microsoft to change the way its operating system software was sold and licensed to computer manufacturers. However, in February 1995 a US district court judge refused to approve the agreement. Both Microsoft and the Justice Department appealed against the decision. In May 1998 the Justice Department and 20 states filed broad antitrust suits charging Microsoft with engaging in anticompetitive conduct. The suits sought to force Microsoft to offer Windows without Internet Explorer or to include Navigator, a competing browser made by Netscape Communications Corporation. The suits also challenged some of the company's contracts and pricing strategies.