Microsoft was founded by Paul Allen and Bill Gates on April 4, 1975, to develop and sell BASIC interpreters for the Altair 8800. It rose to dominate the personal computer operating system market with MS-DOS in the mid-1980s, followed by Microsoft Windows. The company's 1986 initial public offering (IPO), and subsequent rise in its share price, created three billionaires and an estimated 12,000 millionaires among Microsoft employees. Since the 1990s, it has increasingly diversified from the operating system market and has made a number of corporate acquisitions. In May 2011, Microsoft acquired Skype Technologies for $8.5 billion,[10] and in June 2016 bought LinkedIn for $26.2 billion.[11][12]

As of 2015, Microsoft is market-dominant in the IBM PC-compatible operating system market and the office software suite market, although it has lost the majority of the overall operating system market to Android.[13] The company also produces a wide range of other software for desktops and servers, and is active in areas including Internet search (with Bing), the video game industry (with the Xbox, Xbox 360 and Xbox One consoles), the digital services market (through MSN), and mobile phones (via the operating systems of Nokia's former phones[14] and Windows Phone OS). In June 2012, Microsoft entered the personal computer production market for the first time, with the launch of the Microsoft Surface, a line of tablet computers. With the acquisition of Nokia's devices and services division to form Microsoft Mobile, the company re-entered the smartphone hardware market, after its previous attempt, Microsoft Kin, which resulted from their acquisition of Danger Inc.[15]

The word "Microsoft" is a portmanteau of "microcomputer" and "software".[16]