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E-mails From 2003 Reveal Microsoft Caught 'Flat Footed' by iTunes Music Store Launch

Over the weekend, Groklaw discovered a couple of interesting e-mails sent by Microsoft executives Bill Gates and Jim Allchin to other members of the Microsoft executive team revealing that the company had been taken by surprise by Apple's launch of the iTunes Music Store in April 2003. The e-mails were made public as part of an antitrust suit brought against Microsoft in late 2006 for which Groklaw has been documenting the exhibits provided as evidence.

Gates' comments offered a candid assessment of the situation, expressing surprise at Apple CEO Steve Jobs' ability to strike distribution deals with music companies.

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.

This time somehow he has applied his talents in getting a better Licensing deal than anyone else has gotten for music.

This is very strange to me. The music companies own operations offer a service that is truly unfriendly to the user and has been reviewed that way consistently.

Somehow they decide to give Apple the ability to do something pretty good.

In trying to understand how best to respond to Apple's move, Gates noted that Microsoft was caught "flat footed" by Apple's music download service and questioned appropriate strategies to respond.

I am not saying this strangeness means we messed up - at least if we did so did Real and Pressplay and Musicnet and basically everyone else.

Now that Jobs has done it we need to move fast to get something where the UI and Rights are as good.

I am not sure whether we should do this through one of these JVs [joint ventures] or not. I am not sure what the problems are.

However 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.

Microsoft vice president Jim Allchin offered a briefer assessment of the situation, offering only a pair of observations:

1. How did they get the music companies to go along?

2. We were smoked.

The same court case earlier revealed another e-mail from Allchin from 2004 in which he famously said that he "would buy a Mac today if I was not working at Microsoft." Steve Jobs used the quote to take a jab at Microsoft, displaying Allchin's statement at the beginning of Jobs' keynote at Macworld San Francisco 2007.

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30 months ago
"But the iPad isn't all that great." - Bill
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30 months ago
oh microsoft... you make me laugh
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30 months ago
What is with all the focus on Bill Gates today at MR?
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30 months ago

What is with all the focus on Bill Gates today at MR?


for some people making fun of Gates is the highlight of their day ;)

iTunes definitely caught *everybody* off guard; it's interesting to see Gates saying that MS needs to come up with a response - because they sure as hell never produced one.

I do wish iTunes weren't so painful to use sometimes though, especially on a PC. For all its advantages, it still has some issues :(
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30 months ago
Oh this is just precious. I want to put it in a frame. :D:D
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30 months ago
Wow, an e-mail that's nearly 7 years old finally surfaces now, and shows that Microsoft was, and still is playing catch up to Apple. (Not in market share, I know)

I mean, the Zune, C'mon... what's next, the MicroPad?? One failed miserably and the other, if Microsoft even attempts to compete in the iPad arena, will be a total flop as well. Stick to software Microsoft. And even at your best at that, you're still second rate...

I sound like a FanBoy don't I? Hmmm:rolleyes:
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30 months ago
That's going in the siggy :D

But kicks aside, there's some humanity in there, and I feel for Gates and Co.
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30 months ago
"I am not saying this strangeness means we messed up - at least if we did so did Real and Pressplay and Musicnet and basically everyone else."


Who are Pressplay and Musicnet?
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30 months ago

However 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.


quotes like this make me think, Do I want to support a company that is One-Step ahead, or One-Step Behind.
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30 months ago
The Internet - Microsoft caught flat-footed
The iPod/iTunes - Microsoft caught flat-footed
Web search - Microsoft caught flat-footed
The iPhone - Microsoft caught flat-footed

Is there a pattern here?
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