Microsoft Exec Admitted ‘We Were Smoked’ When iTunes Store Opened

When Apple opened the iTunes Store in April 2003, Microsoft executive Jim Allchin remarked in an email: “1. How did they get the music companies to go along? 2. We were smoked.” Bill Gates chimed in to say: “Now that Jobs has done it we need to move fast to get something where the UI and Rights are as good … 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's response was the launch of the MSN Music Store the following year. It ceased operations in 2006 and was never compatible with the company's Zune media player, which uses the Zune Marketplace for music, videos, and the few apps that run on the touch-based Zune HD.

The 2003 emails are part of the thousands made public by a judge after the settlement of the Comes v. Microsoft antitrust lawsuit, according to Groklaw. Thos specific messages are found in a PDF of an exhibit from the case; Groklaw asks its readers for help transcribing other emails made public, so they can be searched by keyword.