Should the "guide" who shows the user around the electronic encyclopaedia be an alien? A child? An adult? An animal? Should there be a guide at all? Should the user have some "mission" to fulfil? If so, how difficult should it be? Moody's book notes how this question goes unresolved throughout almost the entire project.I asked Moody if he thought other businesses could use Microsoft as a model. Microsoft's ethos promotes a culture of conflict between designers and developers, refereed occasionally by their "program managers". More common are the tensions as the young workers strive to mature. "That is a long movie." Then he recalls reading Homer's Iliad (in English) at school, and loving it: "I couldn't believe how graphic that book was when I read it! They should make a movie out of it." This man, remember, plans to make the software to put your children into raptures.But those are the happy, relaxed moments. "I don't see what people say is so great about Citizen Kane," he says. At one stage the head of the multimedia project - a medium which offers intriguing possibilities for combining video, sound and text - offered his opinion on films.

I was struck at every turn by how young these people were, and how inexperienced. Their greenness seemed to render them terrified of making a mistake - with the result that they were unable to commit to a decision and then move on."Others displayed arrogance that bordered on breathtaking philistinism. "I watched and listened in growing amazement," notes Moody, "as work on Sendak kept moving on a variety of fronts, in a direction deemed by all but me to be forward. Moody, who is 46 and has three children, was surprised by how uninterested everyone was in his knowledge or viewpoint, even though his children were their potential audience.Predictably, the programmers' approach yielded few results and a lot of frustration. Instead, they began designing a product that could not, in the end, be programmed as conceived. The CD-ROM team charged headlong into the project - a "multimedia encyclopaedia" dubbed Sendak, aimed at boys and girls aged between six and 11 - without consulting a developmental psychologist, a teacher or even a children's encyclopaedia to find out what sort of things their target audience would find interesting, how they approached learning, or what they would find boring.

Microsoft did not publicly announce the fact until companies writing anti-virus software alerted the media - by which time the virus had spread worldwide. Microsoft still refers to it as a "prank macro" rather than a virus, and says officially: "Nobody from Microsoft wrote the prank macro." But it could very easily have been a contractor who was either trying to impress, or get revenge.Arrogance comes easily to the young, especially in successful companies. The offending programmer was quickly traced and told he would never work for Microsoft again. In a gesture that demonstrates Microsoft's tolerance of student-style japes, he was still given a good job reference.Intentional bug-writing is the likely explanation for another Microsoft embarrassment this summer: in July the company published 5,500 copies of a CD-ROM containing a novel computer virus that could infect word-processing files.

Moody relates a last-minute dash to remove one such bug, in an encyclopaedia CD-ROM, which displayed the message: "Slayer [a heavy metal band] sucks like a vacuum". In his book, Moody tells of one who sat in silence in meetings, often curled up on the floor. Programmers, who turn designs into lines of machine code, have tantrums when changes forced by shifting deadlines generate more work for them.Sometimes freelances, annoyed at not being offered full-time jobs, deliberately insert bugs into programs. Designers, creators of the graphic images on screen, sulk like children when their work is rejected because it does not fit the product's "feel". As one employee puts it, Microsoft "offers us the life we had in school, except we get paid to do our work. And, unlike school, we get to do the really cool stuff."But aptitude does not imply maturity.

They earn good money, up to $50,000 (pounds 32,000) a year doing something for which they have exceptional aptitude. The average age of its 16,000 employees is 31, but its programmers are almost all under 25. The company also uses freelances, many of whom are still undergraduates. They are required to spot errors in programs and write solutions almost instantly. For Microsoft, being bright isn't enough; you have to be exceptional.The combination of extraordinary talent and youth may be the company's worst problem. The exclusive feel is heightened by the company's physical separation from anywhere else - "there isn't anywhere to go for lunch except on the campus," says Moody - and the gruelling recruitment process, in which thousands of applicants are whittled down in rigorous interviews. Yet it still gets results, as its domination of the computer industry has shown.Microsoft operates on a very flat management structure: hundreds of small teams work separately, designing and programming products.