Microsoft Needs to Accelerate Product Development, Co-Founder Allen Says

Microsoft Corp. (MSFT), the world’s largest software maker, “needs to accelerate the pace of product development” to compete with Google Inc. (GOOG) and Apple Inc. (AAPL), co-founder Paul Allen said in an interview.

Microsoft’s Windows 7 phone software and XBox Kinect sensors, which help people play video games using physical motion instead of controllers, are “resonating with a younger audience” as the company tries to “get more momentum” in new technology markets, said Allen, 58, who spoke at an event at the 92nd Street Y in New York last night.

Allen, whose memoir, “Idea Man,” will be released this week, co-founded Microsoft with Bill Gates in 1975. He left the company in 1983 after being diagnosed with Hodgkin’s lymphoma and resigned from the board in 2000. He is the 17th-wealthiest American with a net worth of about $13 billion, according to Forbes magazine, and currently owns the National Basketball Association’s Portland Trail Blazers and the National Football League’s Seattle Seahawks.

Microsoft has struggled to compete with mobile devices from Apple, which has supplanted Microsoft as the largest technology company by market value. Chief Executive Officer Steve Jobs’s transformation of Apple since his return in 1997 has been “unbelievable,” Allen said. Microsoft, Google and Apple may be in a “three-horse race” to innovate and win consumer approval on new platforms including smartphones and tablet computers, he said.

“What he’s done with the iPod, the iPhone and the iPad -- what a triple play there,” Allen said.

Health Disclosures

Like Jobs, Allen is again dealing with health issues. After surviving Hodgkin’s lymphoma, Allen was diagnosed with non- Hodgkin’s lymphoma in 2009. He said it was “important for companies to disclose some level of detail” about their executives’ health conditions for transparency.

Allen declined to comment on the NBA and NFL labor situations, and he wouldn’t say if he would vote for the Sacramento Kings to move to Anaheim, California. One of the NBA’s “biggest challenges” was to come up with a financially feasible revenue sharing plan so that midsize market organizations can field competitive teams, he said.

“No one likes teams moving around, but we all face the financial consequences, too,” Allen said. “No owner enjoys losing money.”

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To contact the editor responsible for this story: Peter Elstrom at

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