Pretty much everyone I met at Microsoft was very smart. But at least within my division, the available energy was never utilized very effectively. I always compared it to a muscle car, sure that V8 has a lot of power, but boy that car can't handle for anything.
With that said, you just can't apply blanket statements to the company. "Microsoft isn't good at the web" just doesn't really mean anything. The Bing team is for all intents and purposes, a completely different company from the IE team, from the Xbox and Zune teams from DevDiv... How a given team at MS does largely depends on how effective its management is. Some teams have really effective managers, PMs, and developers that can execute. Others don't. There is very little (almost none) energy, process or direction that gets applied across the entire company.
"[...] the available energy was never utilized very effectively"
Doesn't that apply to all big corporations to some degree? I think it's a tradeoff between using each individual's potential and utilizing economies of scale. The latter requires coordination of many people, which reduces the leeway for all individuals involved.
Corporate culture is certainly important, but no corporate culture can completely overcome the limitations imposed by utilizing size. At least that's what the ad-hoc scientist in my head says, you know, the one that never reveals any sources ;-)
With that said, you just can't apply blanket statements to the company. "Microsoft isn't good at the web" just doesn't really mean anything. The Bing team is for all intents and purposes, a completely different company from the IE team, from the Xbox and Zune teams from DevDiv... How a given team at MS does largely depends on how effective its management is. Some teams have really effective managers, PMs, and developers that can execute. Others don't. There is very little (almost none) energy, process or direction that gets applied across the entire company.