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This Day In Market History: Microsoft's First Software Deal

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This Day In Market History: Microsoft's First Software Deal

Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.

What Happened? On this day in 1975, Microsoft Corporation (NASDAQ: MSFT) founder Bill Gates signed his first BASIC software licensing deal.

Where The Market Was: The Dow Jones Industrial Average closed the day at 846.76 and the S&P 500 traded at 91.45.

What Else Was Going On In The World? In 1975, the Vietnam War ended when South Vietnam unconditionally surrendered after communist troops took control of Saigon. Sony Corp (NYSE: SNE) released its Betamax video recording system. U.S. interest rates were 7.25%.

Microsoft’s First Deal: In July of 1975, Bill Gates signed his first software licensing agreement to give MITS exclusive rights to use Microsoft’s BASIC software. The terms of the deal allotted $30 to Microsoft for every 4K version of BASIC, $35 for each 8K version of BASIC and $60 for each “extended” version of BASIC included on MITS hardware. Microsoft also received 50% of the revenue from any versions of BASIC MITS licensed without hardware included.

The original Microsoft software agreement was modest in size, generating only about $180,000 in sales. However, the deal allowed Microsoft to establish its first presence in the commercial world.

By 1978, Microsoft generated more than $1 million in sales annually, and the company went public in 1986. Today, Microsoft’s market cap is $1.58 trillion, making it one of the most valuable companies in the world.

 

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