Aging Microsoft lures young tech idealists

SEATTLE (Reuters) - The young interns, some of the nation's best and brightest in technology, business and design, had plenty of enthusiastic words to describe their summer employer.

Fun. Cool. Special. A giant start-up. Revolutionizing the world. Facebook, perhaps? Or Twitter? Or Google?

Try Microsoft Corp: the company once derided as the "death star" of the technology business and lately thought of not so much as dangerous, but merely irrelevant, bureaucratic and dull.

"Microsoft feels cool again," said 22-year-old Gbenga Badipe, an electrical engineering student at Rice University, one of 1,500 interns spending 12 weeks at the company's leafy campus this summer. "Microsoft products touch almost every area of technology, and everything they do is starting to work together."

Microsoft's keen new interns already think their competitors' days are numbered, branding Google and Facebook as "creepy" because of their aggressive stance on privacy and heavy reliance on advertising.

"What kind of business model is that, shoving ads in peoples' faces?" said one Microsoft intern, who asked not to be named.

A recent poll by careers site Glassdoor put Google as the most desirable place to intern, followed closely by Microsoft. They are also the best paid, averaging over $6,000 a month.

Microsoft is "revolutionizing the world," said Juan Llanes, 25, a computer science and finance major at Georgia Tech, who is also interning in Redmond, Washington this summer. Llanes grew up revering Microsoft during his childhood in Cuba, where computers were effectively banned.

Microsoft executives say the youthful enthusiasm evokes the company's heyday in the 1990s, when Bill Gates took his revolutionary startup from being International Business Machine Corp's junior partner to the United States' most valuable company.

"I went to work at Microsoft because I believed," said John Ludwig, a senior executive behind the creation of Internet Explorer and Windows 95. "It wasn't about money. I believed in the idea of getting computers in the hands of everybody."

"Young students want inspiration, they want to follow something," said Ludwig, who left Microsoft in 1999 to found Seattle venture capital firm Ignition Partners. "That underdog thing is a powerful motivator - for a lot of great talent, that's an appealing place to be, that feeling of us against the world."

BACK TO THE FUTURE

Of course, back then the sense of mission was boosted by the fact that Microsoft stock increased 90-fold in the 1990s, creating a host of stock option millionaires. Those days are long over, and Microsoft shares are still well below their 1999 peak.

The idea that the company can embody a start-up spirit at this stage of its development might also be a stretch. A recent book published anonymously by two former Microsoft employees, called ?Stack Rank This!', portrays a company beset by abusive managers and dysfunctional teams where the appraisal process - the notorious stack rank system - actually works against the company's progress.

Indeed, the impression of the company as a Byzantine bureaucracy still turns off some tech-minded students, who are more attracted to younger, faster-moving firms like Facebook.

"There's a definite sense of excitement going on here. There's always revolutions in the making in terms of product development," said Johan Ugander, 27, a PhD student in Applied Math at Cornell University, who is interning for the third consecutive summer at Facebook.

"A lot of the interns I know, a year ago they were working on Timeline," said Ugander. "It's really fun for them to be able to come back to school and as the Facebook product rolls out, to say ?I worked on that all summer.'"

But Ludwig insists that Microsoft's old "scrappy" spirit is starting to resurface. The company may be getting crushed in areas like smartphones and Internet search, but Windows still runs 90 percent of the world's computers, and Microsoft's research and product development efforts are broad and deep.

"To me, Microsoft is a giant start-up battling to innovate while maintaining compatibility," said Llanes from Georgia Tech. "We are underdogs in some areas, and we are strong in other areas with lots of people trying to knock us off. The stakes are incredibly high at Microsoft, and that's the kind of place I want to work."

ROYAL TREATMENT

Microsoft rolls out the red carpet for interns. Last year more than 1,000 of them were treated to a surprise show by the Dave Matthews Band at a Seattle zoo. State troopers paid by Microsoft have in the past cleared the usually clogged State Route 520 floating bridge to downtown Seattle to make way for buses full of interns. They no longer get a barbecue at Bill Gates' lakeside house like they used to, but there is a palpable sense of excitement.

"Everyone says you have the most fun at Microsoft," said one intern, who asked older students at her college about where to apply. "And Microsoft was definitely the best at selling it."

Of last year's computer science graduates from Carnegie Mellon University, both bachelors and masters, Microsoft and Google were top of the list of employers with 18 each, while seven went to Facebook.

"Microsoft is still up there," said Connie Chan, associate director of Stanford Computer Forum, which links up the university's tech students with employers. "It's still one of the companies that are doing really well on campus. Whenever Microsoft comes on campus they always have a large crowd interested in what they are doing."

Some are skeptical that the company is still getting the best talent out of the top schools, however.

"Microsoft's standing is still strong enough such that they can choose to get the (recruiting) numbers they want - if they dig far enough down their list," said one former program manager at the company.

Beyond the ranks of interns, Microsoft still struggles to compete for talent, especially as Facebook and Google recruit aggressively for their Seattle offices.

Microsoft has had recent victories, snagging cutting-edge social scientist Duncan Watts from Yahoo, and welcoming back James Whittaker, a well-known software engineer who left Microsoft for Google three years ago but was turned off by Google's increasing focus on ad revenue.

"There's been a fundamental cultural shift - this really is in many ways a different company," said Whittaker of Microsoft. "At the high levels of the company they are far more willing to consider grassroots innovative ideas bubbling up than they used to be."

There have also been defeats, such as the departure of veteran Windows Phone manager Charlie Kindel, who left last year to found a start up. His successor also recently left for Amazon.

But the maturing process that Microsoft has been through will ultimately catch up with younger rivals too.

"As Google and Facebook get larger, they will inevitably bog down in politics and bureaucracy," said Ben Slivka, a software engineer who led the creation of Microsoft's Internet Explorer browser in the 1990s. "You'll be asking some Google or Facebook veteran the same questions you're asking me now."

(Reporting by Bill Rigby in Seattle; Editing by Jonathan Weber and Richard Chang)

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