Bill Gates' Photo Op

Posted by: Steve Hamm on January 21, 2005

Bill Gates is a patient man. And it’s a good thing. He launched Corbis, an independent company focusing on digital imagery distribution, 16 years ago. Finally, this year, he expects it to break even for the first time.

It’s a funny thing about Corbis—when you compare it to Microsoft. Gates insists that Microsoft has the best approach to the software business. His idea is to build as much functionality as possible into the software rather than delivering a lot of the value through services. He lays out his vision for software’s future in this column he wrote for InformationWeek. Leading with services is the approach of IBM, Microsoft’s arch-rival in enterprise computing. But, with Corbis, which has archiving and search technology as part of the mix, the special sauce is being able to offer a tremendous amount of advisory expertise and services.

Gates and Corbis CEO Steve Davis laid out their vision for Corbis at a breakfast for journalists in New York on Jan. 19. Corbis trots Gates out about once a year as bait to get attention from the press to a company that otherwise might not get much notice. The thing is, Corbis is smack in the middle of a revolution—the digitization of images. That makes it more and more of a compelling story on its own. After Getty Images, it’s the second-largest purveyor of photos and other images for the publishing and advertising industries.

Corbis had a few stumbles early. Gates conceived of it as a marketer of digital images that people would put on flat panel screens in their homes. That didn't take off--yet. “If you want to be the first in something, you have to be ahead of your time, and Corbis has been ahead of its time,” Gates says. “Still, some of the vision won’t be here for another five more years—people putting photos in their homes.”

Corbis has been making all sorts of moves lately. For starters, on Jan. 3 it announced the acquisition of Zefa Visual Media Group of Germany, the No. 3 player, with a big presence in Europe. It's also expanding in Canada and China.

Corbis sees its secret sauce as being expertise and service. Its newest business is a case in point: rights representation. It represents organizations with large collections of visual imagery, starting off with Andy Warhol Foundation and Marvel Enterprises. More will come. Acting as a middleman, Corbis can now both advise its media clients about available imagery for their projects and then broker deals with these iconic rights holders. Being able to offer value-added services is going to be vital for Corbis as time goes on. You can expect new competitors to emerge as the world swings digital and the Internet is harnessed more and more as a cheap and convenient distribution medium. Down the road, observers think Google may become competitors. Gates pooh-poohs the Google idea. “What we’re doing isn’t related to what Google does. Ours is a specialized thing. It’s not generic search.” True, Google isn’t a competitor, for now. But that could change. And, as this market develops, Gates is in the slightly awkward position of betting that services, rather than technology, will win the day.

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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