Hide Your IPod, Here Comes Bill

Microsoft's leafy corporate campus in Redmond, Washington, is beginning to look like the streets of New York, London and just about everywhere else: Wherever you go, white headphones dangle from peoples' ears.

To the growing frustration and annoyance of Microsoft's management, Apple Computer's iPod is wildly popular among Microsoft's workers.

"About 80 percent of Microsoft employees who have a portable music player have an iPod," said one source, a high-level manager who asked to remain anonymous. "It's pretty staggering."

The source estimated 80 percent of Microsoft employees have a music player -- that translates to 16,000 iPod users among the 25,000 who work at or near Microsoft's corporate campus. "This irks the management team no end," said the source.

So popular is the iPod, executives are increasingly sending out memos frowning on its use.

Of course, Microsoft's software is used by dozens of competing music players from manufacturers like Creative Technology, Rio and Sony. Its Windows Media Audio, or WMA, format is supported by several online music stores, including Napster, Musicmatch and Wal-Mart. Microsoft's PlaysForSure program markets this choice as a boon for consumers.

Nonetheless, Apple's iPod commands 65 percent of the portable player market, and its online iTunes Music Store 70 percent of online music sales, according to Apple.

"These guys are really quite scared," said the source of Microsoft's management. "It shows how their backs are against the wall.... Even though it's Microsoft, no one is interested in what we have to offer, even our own employees."

So concerned is management, owning an iPod at Microsoft is beginning to become impolitic, the manager said. Employees are hiding their iPods by swapping the telltale white headphones for a less conspicuous pair.

"Some people are a bit concerned about being traitors, not supporting the company," he said. "They're a bit stealth about it."

How "stealth" varies from division to division. At the company's Macintosh Business Unit, which publishes a wide range of software for the Mac, owning an iPod is almost de rigueur.

But at the Windows Digital Media Group, which is charged with software for portable players and the WMA format, using an iPod is not a good career move.

"In the media group they all smoke the company dope on that one," the manager said.

Mary Jo Foley, editor of Microsoft Watch, said she had no knowledge of the iPod's popularity on Microsoft's campus, but has noticed a lot of iPod chatter among Microsoft's legions of bloggers.

"I have seen lots of Softies blog about it," she wrote in an e-mail.