Microsoft Knew They Got Burned When iTunes First Launched

A series of emails that surfaced in an old Microsoft antitrust case have come to light, the most interesting of which show Bill Gates admitting his company was "flat footed" in the wake of the 2003 iTunes launch.

Microsoft executive Jim Allchin responded to the Gates admission succinctly enough: "We were smoked." You might remember Allchin as the guy who later took the fall for Vista and coped by, naturally, putting out a rock-n-roll album.

It's not the first email that's caught Gates owning up to his company's faults, and I'm sure it won't be the last. What's interesting about this one, though, is his encouragement to "move quick and match and do stuff better." Seven years later, and I'd say they've still got a ways to go.

——- Original Message ——-
From: Bill Gates
Sent: Wed 4/30/2003 10:46 PM
To: Amir Majidimehr; Dave Fester
Cc: Will Poole; Christopher Payne; Yusuf Mehdi; David Cole; Hank Vigil
Subject: Apple's Jobs again.., and time to have a great Windows download service...

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.

I remember discussing EMusic and us saying that model was better than subscription because you would know what you are getting.

With the subscription who can promise you that the cool new stuff you want (or old stuff) will be there?

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 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.

I'm sure people have a lot of thoughts on this. If the plan is clear no meeting is needed. I want to make sure we are coordinated between Windows DMD, MSN and other groups.

.... Original Message ....
From: Jim Allchin
Sent: Wednesday, April 30, 2003 4:58 PM
To: Amir Majidimehr; Chris Jones (WINDOWS); Will Poole; David Cole
Subject: Apple's music store

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

2. We were smoked.

jim

[Groklaw]