Exhibit 10.16                                




January 19, 1998

Mr. Jeff Weitzen
13 Cobblefield Drive
Mendham, NJ  07945

Dear Jeff,

I  am excited about us working together.  I think we seem to have
good synergies in the way we both look at things, and I think  it
would be a blast to work with you to build a company that we  can
both  be  proud of.  A company that currently has great potential
but depends upon great people and leadership to see it live up to
its promise.  Gateway can be truly a company that others envy;  a
company  that is socially responsible and truly designed for  the
next millennium; a company that people would be jazzed to be able
to  work for; and a company that customers trust, respect, admire
and count on.  Great people and fanatical customer loyalty is the
foundation that leads to great financial success.

I am pleased to offer you the key position of President and Chief
Operating Officer of Gateway 2000 under the following terms  (for
defined terms, see Exhibit A):

Title:  President and Chief Operating Officer

Role  and  Responsibilities:  Reporting responsibilities  as  the
title implies.  Direct responsibility for the overall P&L of  the
company   and   managing  our  growth  plans.   Exact   reporting
relationships for persons other than Jeff and Ted will be  agreed
to  by  Jeff  and  Ted  (who  have  agreed  on  Dave's  reporting
relationships), but will include:

All Line Functions,
Product Functions,
Systems, and
Key Operational Entities.

Salary and Bonus:  $750,000 annual salary (pro-rated in the  case
of  a  partial year), plus incentive bonus up to 150%  of  salary
targeted  at  100%, as determined by the Board  of  Directors  or
Compensation  Committee.  You shall receive a minimum  bonus  for
1998 of $250,000.

Initial Options:  Initial grant of options ("Initial Options") to
purchase  1,000,000 shares exercisable at fair  market  value  on
date  of  grant, with a ten-year term (except as provided  below)
and  subject to our standard 4 year vesting.  Full vesting of the
Initial  Options shall occur upon (i) Termination Without  Cause,
(ii)  Termination for Good Reason or (iii) a Change  in  Control.
Full  vesting  of  the Initial Options shall also  occur  upon  a
Nonrenewal of Employment Term (as defined herein).  In the  event
of termination as a result of death or Disability, the portion of
the  Initial Options that would otherwise have vested as a result
of  lapse  of time during the twenty-four month period  following
such  event  shall immediately become exercisable and  any  other
unvested  portion shall lapse. The exercise period of the  vested
portion  of  the Initial Options shall cease one (1)  year  after
termination  in the case of termination as a result of  death  or
Disability,  Termination  without  Cause,  Termination  for  Good
Reason,  Nonrenewal of Employment Term or a termination  for  any
reason whatsoever occurring on or after a Change in Control  and,
in  all  other  cases, ninety (90) days after  termination.   The
Initial  Options will be granted under Gateway's  1996  Long-Term
Incentive Equity Plan ("Plan") and shall be subject to the  terms
of the Plan.

Recurring  Options: Eligible for additional options  starting  in
1999.  Targeted at options to purchase 75,000 shares twice a year
based  on  a $30 stock price (i.e., targets subject to adjustment
based  on  Black-Scholes value), in each case subject to approval
of the Board of Directors or Compensation Committee in accordance
with the Plan or other applicable Gateway stock option plan.  The
terms  of  such  options shall be established  by  the  Board  of
Directors or Compensation Committee at the time of grant.

Up-front Sign-On Bonus:  Signing bonus (within ten (10)  days  of
commencement  of employment) of $1,400,000 in cash,  plus  fully-
vested  stock  grant  under the Plan  (or  outside  the  Plan  on
substantially the same terms) valued at $600,000 at public market
price of Gateway stock on date of grant.

Relocation:  Reimbursement for reasonable relocation expenses  on
an  after-tax basis in accordance with Gateway's relocation  plan
including   reasonable  loss  on  sale  of   current   home   and
reimbursement of reasonable temporary living expenses.

Term:   Thirty-six  months  after  commencement   of   employment
("Employment Term"), subject to renewal for successive additional
one (1) year periods by mutual agreement of the parties; provided
that  your Employment Term hereunder shall terminate earlier upon
your  death, Termination for Cause or Disability by the  Company,
Termination  Without Cause by the Company, Termination  for  Good
Reason  by  you,  Termination  without  Good  Reason  by  you  or
Termination as a result of Change in Control by you.

Change   of  Control,  Termination  Without  Cause,  Etc.:   Upon
(i)  Termination Without Cause, (ii) Termination for Good Reason,
(iii) Nonrenewal of Employment Term or (iv) termination by you or
the  Company of your employment for any reason whatsoever  (other
than  Cause) within six (6) months after the effective date of  a
Change  in  Control  ("Termination  as  a  result  of  Change  in
Control"),  you  will receive in a lump sum, within  twenty  (20)
days  thereafter, an amount equal to three (3) times the  sum  of
your  then current annual base salary (prior to any deduction  in
violation  hereof)  and annual incentive bonus  (being  prior  to
January  1,  1999, your target bonus and thereafter  the  highest
such  bonus for any of the last two completed fiscal years up  to
but  not in excess of your then current annual base salary (prior
to  any deduction in violation hereof)).  Such payments shall  be
your  sole  remedy  for such termination of the  Employment  Term
except  as  specifically provided herein.   In  the  event  of  a
Termination by you as a result of Change in Control,  you  agree,
at the Company's request made within ten (10) days of your giving
notice  of  termination as a result of a Change  in  Control,  to
either  (as  requested  by the Company)  (i)  continue  full-time
service  to  the  Company for a transition  period  ending  three
months  after the effective date of the Change in Control  unless
terminated  earlier  by the Company or by  you  for  Good  Reason
(other than a breach of clause (a)(ii) of the definition of  such
term  because  you are reporting to a new CEO)  or  (ii)  provide
senior   level  consulting  services  as  an  employee   on   the
compensation terms then in effect for up to a three month  period
after the effective date of the Change in Control.

Excise  Tax:   In  the  event  any  payment  in  the  nature   of
compensation made, directly or indirectly, by the Company to  you
which  is  contingent on a change in the ownership  or  effective
control  of  the  company or in the ownership  of  a  substantial
portion  of  the assets of the Company (such terms  having  their
respective meanings under Code Section 280G) is subject to excise
tax  pursuant  to  Section 4999 of the Internal Revenue  Code  of
1986,  as  amended  ("Code"), on "excess parachute  payments"  as
defined in Code Section 280G (an "Excise Tax"), the Company shall
pay   you  an  amount  equal  to  such  Excise  Tax  ("Additional
Compensation") but without further reimbursement to you  for  any
Excise  Tax  or  additional taxes payable with  respect  to  such
Additional  Compensation.  You agree, in the  event  you  believe
that  you are required to pay any such Excise Tax, to afford  the
Company  the reasonable ability, after it has paid you  any  such
amount  then  due, to contest the imposition of such Excise  Tax.
In  the  event the amount you would receive after the application
of  the  immediately preceding sentence, net  of  all  applicable
income,  excise  and payroll taxes, is less than the  amount  you
would  receive, net of all applicable income, excise and  payroll
taxes, if your total compensation were reduced to a level that is
the maximum amount that you could receive without there being any
"excess  parachute  payment" under Code  Section  280G  (the  "No
Parachute Maximum"), your compensation shall be reduced to the No
Parachute  Maximum by reducing the lump sum payment  due  to  you
hereunder.

Life and Disability Insurance:  In addition to any life insurance
benefits  generally available to you as a senior  executive,  the
Company will pay the premiums for a $5,000,000 term life and lump
sum  Disability insurance policy for the initial 12-month  period
during  the Employment Term only and a $2,500,000 term  life  and
lump  sum Disability insurance policy for the succeeding 12-month
period  of  the Employment Term only (together in each case  with
any  amount to reimburse you, on after tax basis, for the  income
and  payroll  taxes, if any, payable by you due to the  Company's
payment  of such premiums and reimbursements), provided  that  if
you  are not then insurable at normal rates for a person of  your
age,  the  Company will purchase as much insurance as purchasable
at standard rates.

All   Terminations:   Accrued  Amounts  when   determinable   and
otherwise  due; and no other amounts shall be payable  except  as
provided herein.

Transition and Timing:  To be mutually agreed, but anticipated to
be starting February of 1998.

Other:   (i)  Indemnification to the  full  extent  permitted  by
applicable  law and coverage with respect to claims (both  during
and  after employment) relating to your period of service  during
the  Employment Term under the Company's directors  and  officers
insurance   policy   (as   in  effect   from   time   to   time),
(ii)  participation in all benefits, fringe, incentive and equity
compensation  plans  (provided that  any  specific  benefits  and
rights  hereunder shall be netted against any such other  similar
benefits  and  plans)  that  are generally  available  to  senior
executives to the extent you are eligible to participate therein;
(iii)  payment  of your reasonable out-of-pocket legal  fees  and
disbursements for reviewing this arrangement and reimbursement of
your   reasonable  out-of-pocket  legal  fees  and  disbursements
relating to any claim in which you obtain a final judgment  of  a
court of competent jurisdiction against the Company for breach of
this  letter if you materially prevail in the matters  raised  in
such litigation; and (iv) inclusion in management's slate for the
Company's Board of Directors (without additional compensation) at
the next annual meeting of stockholders following commencement of
employment.  All payments and benefits provided under this letter
shall  be  subject  to  withholding  for  applicable  income  (or
similar)  taxes.  As a Company executive, you shall be  bound  by
the  terms  of the Company's Nondisclosure/Intellectual  Property
and  Non-Competition Agreements in the respective forms  attached
hereto,  the  provisions  of  which are  incorporated  herein  by
reference.

Jeff,  I am very excited about wrapping this up and getting  down
to  building a great company together.  I believe it is  in  both
our  best  interests to reach agreement on the above as  soon  as
possible.

Sincerely,



Ted Waitt, Chairman
Chief Executive Officer




The  above  offer is subject to Board approval, and is made  upon
reliance  of Jeff's representation that he is free to accept  the
offer  and commence exclusive employment with the Company  as  of
the  date of commencement contemplated hereby without restriction
from   any   employer   other  than  the  Company   (other   than
confidentiality  obligations  arising  either  at  law  or  under
agreement(s)  heretofore provided to the Company),  provided  the
foregoing shall not prevent you from being involved in charitable
activities  or  managing your personal investments  (which  shall
exclude investments in competitors of the Company posted  at  the
time  of investment other than passive investments of a less than
five  percent equity or debt interest).  This letter may  not  be
assigned  by  you  or the Company other than by  the  Company  in
connection with a sale of all or substantially all of its  assets
or  by  law  as  a  result  of a merger or  consolidation.   Upon
acceptance hereof this letter shall be binding upon and inure  to
the  benefit  of  the parties and their successors  or  permitted
assigns  in  accordance  with  the  terms  hereof.   This  letter
constitutes  the entire agreement of the parties  and  supersedes
all  other prior agreements and understandings, both written  and
oral,  among the parties, and shall be governed by and  construed
in  accordance  with  the internal laws of  the  State  of  South
Dakota.


ACCEPTED AND AGREED TO:



________________________
Jeff Weitzen

                           EXHIBIT A
                  

Cause shall mean (a) your material breach of any of the terms  of
the  Nondisclosure/Intellectual Property Agreement  or  the  Non-
Competition  Agreement, or your representation and  agreement  to
provide services on an exclusive basis to the Company during  the
Employment  Term,  which breach in any case is not  cured  within
twenty   (20)  days  of  written  notice  thereof;  (b)   willful
misconduct  with  regard  to  the Company  or  gross  neglect  or
dereliction  of duty resulting in either such case,  in  material
economic harm to the Company; (c) failure to follow (or  in  good
faith  attempt to follow) the reasonable lawful written direction
of  the  Company's  CEO,  Chairman  or  Board  of  Directors;  or
(d)  conviction  of,  or pleading nolo contendere  to,  a  felony
(other  than  a felony predicated on your vicarious liability  or
involving  a  routine  traffic  violation)  or  any  other  crime
involving securities fraud or theft of substantial assets of  the
Company.   Vicarious liability shall mean any liability which  is
based on acts of the Company for which you are charged solely  as
a  result of your offices with the Company and in which you  were
not  directly involved or had prior knowledge of such actions  or
intended  actions with, in either case, knowledge  or  reasonable
belief that a law was being violated.

Disability shall mean you are then incapable or absent from  your
duties  with the Company on a full-time basis because of physical
or  mental  incapacity to perform your material duties  and  have
been so for 180 days.

Termination  for  Disability shall  mean  a  termination  by  the
Company while and as a result of your Disability.

Termination  Without  Cause shall mean  any  termination  by  the
Company during the Employment Term other than for Cause or  as  a
result  of death or Disability.  A Nonrenewal of Employment  Term
shall be treated the same as a Termination Without Cause.

Good  Reason  shall  mean  (a) any diminution  in  title  or  any
material  diminution  in authority, responsibility  or  reporting
lines  not  commensurate  with your position  including  but  not
limited  to as a material diminution (i) maintaining your current
position but in an entity that is a subsidiary of another  entity
and  not  in  the  ultimate parent company or (ii)  reporting  to
anyone  but the Board of Directors or Ted Waitt or (b) any  other
material breach by the Company of this letter, which in any  case
is  not cured within twenty days of written notice thereof.  Your
sole  remedy  for any breach of this letter by the Company  which
would  provide  you with a right to terminate  with  Good  Reason
shall be a Termination for Good Reason.

Termination for Good Reason shall mean a termination by you as  a
result  of  the  occurrence of a Good Reason event  that  remains
uncured  for the specified period.  Any notice of termination  of
employment for a specific Good Reason event shall be given within
180  days  after the first occurrence of the event on which  such
Good Reason termination is to be based.

Termination without Good Reason shall mean any termination by you
other than a Termination for Good Reason.

Nonrenewal   of  Employment  Term  shall  occur  on   the   third
anniversary of the commencement date of employment, unless  prior
to  such  date the Employment Term shall have terminated  or  the
parties  shall  have  agreed in writing to an  extension  of  the
employment  term, if the reason for nonrenewal is a determination
by  the Company not to extend the term for any reason (other than
Cause, death, Disability or the lack of your agreement to extend)
or  a  determination by you not to accept the terms  relating  to
title,  role and responsibility (whether or not the  same  as  in
this  letter) or relating to compensation or the other applicable
material terms set forth herein as part of such renewal, it being
understood  that  your  refusal  to  accept  a  continuation  (or
increase) of the level of compensation you are then receiving, to
agree  to a renewal absent an additional sign-on bonus or options
or  to  accept  continuation of such other material  terms  (i.e.
other than title, role and responsibility) shall not be deemed to
constitute  a  Nonrenewal of Employment Term.  Any nonrenewal  of
the  Employment  Term  for any reason not  within  the  foregoing
provisions shall not constitute a "Nonrenewal of Employment Term"
for  purposes  hereof,  and  shall be treated  as  a  Termination
without Good Reason.

Accrued Amounts shall mean (a) Base Salary, benefits, fringes and
expense   reimbursements  due  for  the  period  prior   to   any
termination,  (b)  any bonuses earned but unpaid  for  any  prior
fiscal  year and a pro rata bonus (based on period of service  in
the  current  fiscal  year provided at least  three  months  have
elapsed  in  such  year  prior to termination)  based  on  actual
achievement  against targets during the fiscal year and  (c)  any
other amounts due under the terms of any plan or program.

Change  in Control shall have the meaning set forth in the  Plan,
provided  that  no  Change in Control shall  be  deemed  to  have
occurred while Ted Waitt continues to serve as CEO of the Company
(or  if  the  Company becomes a subsidiary, its  ultimate  parent
entity)  or, in the case of a sale, transfer or other disposition
of  assets,  its  successor  (or  if  its  successor  becomes   a
subsidiary, its ultimate parent entity).