updated 08:15 pm EST, Tue February 9, 2010
Separate exec claims "we were smoked"
Following the stir created by ex-Microsoft executive Dick Brass, who recently claimed the company had become an "uncompetitive innovator," attention has returned to internal e-mails that were made public during an antitrust lawsuit several years ago. The legal blog Groklaw has sifted through many of the documents, uncovering a message from 2003 showing Bill Gates' praise for Steve Jobs and iTunes.
"Steve Jobs ability to focus in on a few things that count, get people who get user interface right and market things as revolutionary are amazing things," Gates told several executives. "This time somehow he has applied his talents in getting a better Licensing deal than anyone else has gotten for music."
Gates continued by expressing the need for Microsoft to catch up. "Now that Jobs has done it we need to move fast enough to get something where the UI and Rights are as good," he said.
"I am not sure what the problems are," Gates added. "I think we need some plan to prove that even though Jobs has us a bit flat footed again we move quick and both match and do stuff better."
"We were smoked," Jim Allchin admitted in a response to Gates' inquiry.
Despite Microsoft's dominant position in many markets, the company has been criticized by Brass and analysts for lacking innovation and falling behind its competitors. Lackluster performance has been observed in product categories such as smartphones, gaming consoles and Internet browsers, among others.
Microsoft corporate communications head Frank Shaw quickly refuted Brass' stance, claiming the company should be judged by its "broader impact."