From Mountain View, CA — 09/22/2010
I was at WebTV when Microsoft bought us in 1997. They told us how much they loved us, what we had accomplished, our vision...and then set about dismantling us.
First they took our group of "producers", non-techie types who put together content for the system. They reassigned most of them to be QA engineers. Imagine! How does someone go from being an English major at Stanford to a QA engineer without any training?
Second, they set about trying to swap out our own tried-and-true technologies for some of their own. Disaster. The decisions were being made on what was MSFT, not what was the best choice. Put WinCE into our device? You gotta be kidding me.
Of course people left as more bad decisions were made. Nobody was the defender of the technology or the customer, and MSFT succeeded in killing another competitor. Yes, competitor. You see, MSFT had spent something like $2 BILLION on trying to break into the home entertainment space by that point. Everything from MSFT VCRs and "smart" DVD players and even an MSFT television had been worked on and failed. MSFT was determined to make it into the living room, so in purchasing a company who was having success there and apply typical MSFT strategies, they both got what they wanted and killed it in one fell swoop.
Oh, and the Ming the Merciless character from MSFT HR who moved down to California to oversee the transition was a real hoot. She wore her collars up, as though they defied physics. She defied a lot herself, including common sense. For example, when the former WebTV CEO exited, she began interviewing every other employ who exited asking for dirt on the old CEO. Clearly, MSFT was interested in taking him down, for some reason. No reason to ask for dirt on a previous employee otherwise. And this got around, angering many of the people who were first-on in the start-up period, so they left because MSFT showed little respect for the founder of the company.
We had our own building, a former Sun Microsystems building. It was nice. My co-workers from the acquisition were pretty much some of the best people I worked with before or since. The people we started working with in Redmond, though, weren't quite as smart. In my opinion, some MSFT managers frequently proved ignorant about our product, service, customers, market, and opportunities. Yet these same managers held power over us and made decisions for us. Yes, all you higher-ups, you might want to read that again. There were some people who fit that description. So, people left because of bad management out of Redmond, too.
MSFT didn't want to adjust our pay based on cost of living. We had been on slave wages for our start-up period, so when we were purchased by the richest company in our industry (second wealthiest in the whole USA), we had every expectation of being brought up to more livable pay rates. At that time, the Bay Area outranked Beverly Hills in terms of cost of living. Instead of bring us up to parity with our friends at established companies in the area, they gave us a 5% increase, as I recall and promised to reconsider things in another year. Woo-hoo.
Ming the Merciless said at a company meeting that we were at parity with Redmond, so MSFT was satisfied that we were well paid. Redmond? Are you fricking kidding me? Just because someone could live very well on $30K in Redmond, WA in 1997 didn't mean they could live in San Francisco in anything more than a studio apartment they share with two others. So, people left MSFT for better paying jobs, too.
MSFT stock began sliding down around that time. Dropping, dropping. And it's never recovered. That's another reason why people left. If you don't get a pay raise, all you have to hope for is stock or another job.
Of course, some WebTV people converted to the MSFT mentality and playbook just fine. Some are still there. What's evil to one is fair game to another, and I don't deny it.
Long hours, little respect, lower-than-average pay for the area, and there you have it. MSFT acquisition strategy in a nutshell. At least, that's how it was in 1997.