The ‘Dr. Lee’ Saga Continues, MSFT vs. Google

07 Sep 2005

Very interesting post over on Scripting News.

For those following the details, this might get tiring. But for those wanting to catch up, John Battelle has done a good job covering the clawing and scratching in the wake of Google’s hiring of China expert Kai-Fu Lee away from Microsoft, which we first reported here.

First, Mark Lucovsky, an engineer at Microsoft who defected to Google in November of 2004, stated that he met with Microsoft’s CEO Steve Ballmer that month to discuss his planned departure:

At some point in the conversation Mr. Ballmer said: ‘Just tell me it’s not Google.’ I told him it was Google. At that point, Mr. Ballmer picked up a chair and threw it across the room hitting a table in his office. Mr. Ballmer then said: ‘Fucking Eric Schmidt is a fucking pussy. I’m going to fucking bury that guy, I have done it before, and I will do it again. I’m going to fucking kill Google.’

Of course, Microsoft responded with a statement from Ballmer claiming Lucovsky’s was exaggerated (though Gillmor points out that Ballmer’s reply was essentially a press release, and not taken under oath, like Lucovsky’s statement). Next, in Microsoft’s request for preliminary injunction, Microsoft makes some claims that, if true, makes you wonder why Google would ever trust Kai-Fu Lee in the first place. Microsoft says Lee actively tried to get hired by Google, even while working at Microsoft, using his knowledge of MSFT’s competitive plans as bait, including sending confidential information over to Google.

To which, Google responds copiously. Eye-opening is this NYT piece, referring to Lee’s expressed frustration at Microsoft’s lack of traction in China. He also said Microsoft’s Bill Gates yelled at him and said that the company had been done in by the Chinese people and its government.

AP has an interesting blurb on a line from Jonathan Rosenberg, Google’s director of business development: “I all but insist that we pull out all the stops and pursue him like wolves,” Mr. Rosenberg wrote of Mr. Lee. “He is an all-star and will contribute in ways that go substantially beyond China.”

I guess it’s all about each side building up their case. In the game of corporate combatance, there’s no love lost between these two and I don’t really blame either of them. Obviously you’re going to place a lot of emphasis on the recruition of A-listers and there’s a lot of fear and uncertainty when one of them decides to leave. It happens in professional sports. The rules of engagement are (probably) often broken, and the offenders rarely caught. In this case it involved someone of enough significance to both sides that a stink was raised.

It’ll be interesting to see how this plays out. In Dr. Lee’s favor, I wouldn’t say that Microsoft should have the right to restrict his ability to seek and gain active employment in his area of specialty. However, the flaunting of private and privileged information isn’t exactly above the board and should not be encouraged on any level. I guess it’s the precise definition of private and privileged that’s causing a stir. Everybody knows that Microsoft is going after Google and vice-versa. I’m sure (completely unfounded assumption) there already is substantial corporate espoionage going on between the two organization.

It’s interesting to see and hear first hand the types of things people will divulge over the course of recruitment. Dr. Lee might not end up working on technology complementary to his work at Microsoft but did his previous research direction (and not skillset) as leverge? Microsoft made an investment and obviously they don’t want to see it walk out the door.

Google’s offer definitely would entice me

…he was offered an extremely generous compensation package, described internally at Google as “unprecedented”…it included: (1) a signing bonus of $2.5 million, (2) an additional bonus of $1.5 million after the first year, (3) a base salary of $250,000 per year….(4) options for 10,000 shares of Google stock, (5) a grant of 20,000 Google Stock Units over four years (with a value of over $5 million…)