The August issue of Vanity Fair fully dissects “How Microsoft Lost Its Mojo,” but it also gives an interesting glimpse at how the once-reigning tech company foolishly underestimated Google.

The actual article is not online, but BetaBeat obtained a physical copy and found a little nugget buried inside that describes chief executive Steve Ballmer going on a rampage in 2004. After allegedly throwing a chair, the CEO had this to scream say about an engineer who left Microsoft for Google:

“Fucking Eric Schmidt is a fucking pussy!” Ballmer yelled, according to the court document. “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.”

Ballmer is notorious for his emotional antics and miscalculated quotes about the competition. The video atop is a perfect demonstration of Ballmer going, well, crazy. Meanwhile, the video below shows the executive laughing about the iPhone in 2007, while dismissing its ability to handle business-oriented tasks due to its lack of a tangible keyboard.

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Microsoft is notably fledging in the mobile space that both Google and Apple currently dominate. Its 2010 KIN smartphone, which targeted users of social networking, suffered from poor sales almost immediately, and Microsoft discontinued the brand just 48 days after launch. Microsoft also introduced the Zune portable media player in 2006 with OEM partners Toshiba, Flextronics, etc., to contend with Apple’s iPod, but the Zune is now undergoing discontinuation. Let’s also remember the promising Courier tablet that Microsoft killed in 2010 before it even received a chance.

The folks in Redmond, Wash., further face competition from Google in the productivity space. Google offers Google Apps, which is a cloud-based suite of software akin to Microsoft Office, and its gradual market takeover forced Microsoft to embark on a smear campaign earlier this year. Microsoft-backed videos, ads, and websites lambasted the Mountain View, Calif.-based Company as a shady advertiser with alternative motives (video below).

It seems as though, according to the anecdote from Vanity Fair, Microsoft’s mud-slinging fest dates back to the early days of Google, and the company continues to misjudge the game as much as it ever did.