Following is a transcript of the interview Kara Swisher and Walt Mossberg conducted with Microsoft Chairman Bill Gates and Apple CEO Steve Jobs at the D5 conference on May 30, 2007.

[Video plays]

Kara: Well, thank you.

Walt: Before we get started, there were some pioneers–of course, we have the pioneers here on the stage, but there were some other really important pioneers in the video we just saw and a couple of them are here in the audience. Mitch Kapor, who is a regular, could you just stand up, wherever you are? There he is.

[Applause]

Walt: And Fred Gibbons, who has not come to D before, but is here tonight. Fred. There’s Fred right there.

[Applause]

Walt: And I don’t know if he’s in the room, but I do want to recognize our fellow journalist, Brent Schlender from Fortune, who, to my knowledge, did the last joint interview these guys did. It was not onstage, but it was Fortune magazine. Brent, I don’t know if you’re in the room. If you are, can you stand?Maybe he’s way over there.

[Applause]

Kara: So let’s get started. I wanted to ask, there’s been a lot of mano-a-mano/catfight kind of thing in a lot of the blogs and the press and stuff like that, and we wanted to–the first question I was interested in asking is what you think each has contributed to the computer and technology industry, starting with you, Steve, for Bill, and vice versa.

Steve: Well, you know, Bill built the first software company in the industry and I think he built the first software company before anybody really in our industry knew what a software company was, except for these guys. And that was huge. That was really huge. And the business model that they ended up pursuing turned out to be the one that worked really well, you know, for the industry. I think the biggest thing was, Bill was really focused on software before almost anybody else had a clue that it was really the software.

Kara: Was important?

Steve: That’s what I see. I mean, a lot of other things you could say, but that’s the high order bit And I think building a company’s really hard, and it requires your greatest persuasive abilities to hire the best people you can and keep them at your company and keep them working, doing the best work of their lives, hopefully. And Bill’s been able to stay with it for all these years.

Walt: Bill, how about the contribution of Steve and Apple?

Bill: Well, first, I want to clarify: I’m not Fake Steve Jobs.

What Steve’s done is quite phenomenal, and if you look back to 1977, that Apple II computer, the idea that it would be a mass-market machine, you know, the bet that was made there by Apple uniquely–there were other people with products, but the idea that this could be an incredible empowering phenomenon, Apple pursued that dream.

Then one of the most fun things we did was the Macintosh and that was so risky People may not remember that Apple really bet the company. Lisa hadn’t done that well, and some people were saying that general approach wasn’t good, but the team that Steve built even within the company to pursue that, even some days it felt a little ahead of its time–I don’t know if you remember that Twiggy disk drive and…

Steve: One hundred twenty-eight K.

Kara: Oh, the Twiggy disk drive, yes.

Bill: Steve gave a speech once, which is one of my favorites, where he talked about, in a certain sense, we build the products that we want to use ourselves. And so he’s really pursued that with incredible taste and elegance that has had a huge impact on the industry. And his ability to always come around and figure out where that next bet should be has been phenomenal. Apple literally was failing when Steve went back and re-infused the innovation and risk-taking that have been phenomenal. So the industry’s benefited immensely from his work. We’ve both been lucky to be part of it, but I’d say he’s contributed as much as anyone.

Steve: We’ve also both been incredibly lucky to have had great partners that we started the companies with and we’ve attracted great people. I mean, so everything that’s been done at Microsoft and at Apple has been done by just remarkable people, none of which are sitting up here today.

Kara: Well, not us.

Walt: Not us. So in a way, you’re the stand-ins for all those other people.

Steve: Yeah, in a way, we are. In a very tangible way.

Walt: So Bill mentioned the Apple II and 1977 and 30 years ago. And there were a couple of other computers which were aimed at the idea that average people might be able to use them, and looking back on it, a really average-average person might not have been able to use them by today’s standards, but it certainly broadened the base of who could use computers.

I actually looked at an Apple ad from 1978. It was a print ad. That shows you how ancient it was. And it said, thousands of people have discovered the Apple computer. Thousands of people. And it also said, you don’t want to buy one of these computers where you put a cartridge in. I think that was a reference to one of the Atari or something.

Steve: Oh, no.

Walt: You want a computer you can write your own programs on. And obviously, people still do.

Steve: We had some very strange ads back then. We had one where it was in a kitchen and there was a woman that looked like the wife and she was typing in recipes on the computer with the husband looking on approvingly in the back. Stuff like that.

Walt: How did that work for you?

Steve: I don’t think well.

Walt: I know you started Microsoft prior to 1977. I think Apple started the year before, in ’76.

Steve: ’76.

Walt: Microsoft in …

Bill:’74 was when we started writing BASIC. Then we shipped the BASIC in ’75.

Walt: Some people here, but I don’t think most people, know that there was actually some Microsoft software in that Apple II computer. You want to talk about what happened there, how that occurred?

Bill: Yeah. There had been the Altair and a few other companies–actually, about 24–that had done various machines, but the ’77 group included the PET, TRS-80 …

Walt: Commodore?

Bill: Yeah, the Commodore PET, TRS-80 and the Apple II. The original Apple II BASIC, the Integer BASIC, we had nothing to do with. But then there was a floating-point one where–and I mostly worked with Woz on that.

Steve: Let me tell the story. My partner we started out with, this guy named Steve Wozniak. Brilliant, brilliant guy. He writes this BASIC that is, like, the best BASIC on the planet. It does stuff that no other BASIC’s ever done. You don’t have to run it to find your error messages. It finds them when you type it in and stuff. It’s perfect in every way, except for one thing, which is it’s just fixed-point, right? It’s not floating-point.

So we’re getting a lot of input that people want this BASIC to be floating-point. And, like, we’re begging Woz, please, please make this floating point.

Walt: Who’s we? How many people are in Apple?

Steve: Well, me. We’re begging Woz to make this floating-point and he just never does it. You know, and he wrote it by hand on paper. I mean, you know, he didn’t have an assembler or anything to write it with. It was all just written on paper and he’d type it in. He just never got around to making it floating-point.

Kara: Why?

Steve: This is one of the mysteries of life. I don’t know, but he never did. So, you know, Microsoft had this very popular, really good floating-point BASIC that we ended up going to them and saying “help.”

Walt: And how much was the–I think you were telling us earlier …

Bill: Oh, it was $31,000.

Walt: That Apple paid you for the …

Bill: For the floating-point BASIC. And I flew out to Apple, I spent two days there getting the cassette. The cassette tapes were the main ways that people stored things at the time, right? And, you know, that was fun.

I think the most fun is later when we worked together.

Walt: What was the most fun? Tell the story about the most fun that was later.

Kara: Or maybe later, not the most fun.

Walt: Let them talk.

Kara: Teasing.