One of the weird things about this is that Microsoft had compiler and programming language stuff as their bread and butter for a time. So Myrhvold's reply does

One of the weird things about this is that Microsoft had compiler and programming language stuff as their bread and butter for a time. So Myrhvold's reply does include "embrace and extend" and that they'll do J++, but I'm not sure why that point wasn't emphasized more. A programming language ecosystem was their wheelhouse. They of course got in trouble trying to out-Java Java, and still calling it Java. They did C# and while it did not "kill Java", it was hugely successful for them. It'd be a somewhat reasonable and simple answer, and an honest one, to Gates's concern: "well, let's be a kickass platform to run Java on."