Scroogled: Microsoft Escalates Google Battle

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Escalating one of tech's biggest rivalries, Microsoft is accusing Google (GOOG) of compromising the privacy of Gmail users — leveling the charge in an unusual, in-your-face ad campaign that it hopes will resonate with consumers even if some analysts call it alarmist and irresponsible.

The public attacks — in print, television and billboard messages that warn consumers about the supposed dangers of being "Scroogled," or mistreated by Google — marks a strategic shift in a clash of Internet titans, under the guidance of a bare-knuckle political campaign strategist.

An image from Microsoft's "Scroogled" ad campaign against Google.

Despite spending billions of dollars to build its own Bing search engine and online advertising service, Microsoft has failed to put much of a dent in Google's dominance of the Internet ad business. It has also gained little traction with a behind-the-scenes effort to convince government officials that Google's business is anti-competitive.

Now the Redmond, Wash., software giant is waging a high-profile, election-style blitz against its Mountain View rival — using public opinion polls, for example, to shape rapid-fire attacks — with the help of Mark Penn, a veteran public relations executive and former campaign adviser to former President Bill Clinton and his wife, former Secretary of State Hillary Rodham Clinton. Penn, who previously consulted for Microsoft, was hired full time last year.

Penn has been advising Microsoft on how to "take a fairly esoteric and complex issue and make it accessible to people who don't live in technology all day," according to Stefan Weitz, who oversees Microsoft's online businesses.

Public attacks on competitors aren't the norm for most tech companies, but there is precedent. Oracle (ORCL) has blasted Hewlett-Packard (HPQ) and others. Two years ago, Google accused Bing of copying its search results.

But some industry experts are critical of Microsoft's latest volley, which suggests Google is invading users' privacy by delivering ads tailored to keywords in consumers' email messages. Analysts say the practice, which relies on automated software, has been accepted for nearly a decade.

"The idea that one company is better than the other is disingenuous and deceptive," said consumer advocate Jeff Chester of the Center for Digital Democracy, adding that all major Internet companies collect user data. "If Microsoft was as successful as Google in the search business, you would not hear a peep out of them on privacy."

Another privacy advocate, however, said he's happy to see a big Internet company treat privacy as a competitive feature. "I think it's very healthy," said John Simpson of the nonprofit Consumer Watchdog, "even if they're using it to make a buck."

Microsoft first showed its new strategy in the fall with a campaign urging consumers to compare Bing and Google search results. It followed up with ads that criticized a recent change in Google's shopping search service, which had begun showing only results from merchants who pay to be included.

An image from Microsoft's "Scroogled" ad campaign against Google.

Google says its new shopping search policy means consumers get the most accurate listings, but Microsoft and other critics accused Google of quietly abandoning objective results. The attack drew a backlash, however, after the influential blog Search Engine Land reported Bing's shopping service was also requiring merchants to pay for listings.

While Microsoft says it now accepts free listings, blogger Danny Sullivan, the founding editor of Search Engine Land who sharply criticized Google's shopping listings, concluded that "Bing itself does the same things it accuses Google of."

Microsoft launched another round of ads this month that attack Google's widely used email program, the free, Web-based service Gmail.

"Google looks for keywords in your personal email and uses them to target you with paid ads," Microsoft charged. In an interview, Weitz cited a Microsoft poll that found people overwhelmingly disapprove of that practice, which he said consumers view as "creepy."

The poll itself, and the Microsoft ads, don't specify how emails are scanned. In a statement, Google said "no humans read your email" and said Gmail ads are chosen by "an automated algorithm" similar to programs that screen out spam.

Google has operated Gmail on the same model since 2004, using software that automatically looks for keywords, such as names of consumer products or travel destinations, which trigger the display of relevant ads.

"Nobody from Google or its advertisers has the ability to come to your house or call you on the phone as a result" of the Gmail program, said Rebecca Lieb, digital ad analyst for the Altimeter Group. "I think it's irresponsible to raise alarms about things that aren't adequately explained."

Microsoft's own Web-mail service,, doesn't tailor ads to the content of emails, but it does shows ads based on age, gender and other details that users provide when they open an account.

Weitz conceded Microsoft's campaign may not resonate with tech-savvy industry insiders. But citing comments posted on a Microsoft website, he added, "A number of folks in the mainstream are saying there's a point here. Their response is uniformly outraged."

Internet Clash

Google handled 67 percent of Internet search requests last month; Microsoft had 16.5 percent and Yahoo had 12.1 percent, according to comScore.
Google had 74.5 percent of U.S. search advertising revenue last year; Microsoft had 8 percent and Yahoo had 6.2 percent, according to eMarketer.
Google says its Gmail service has 425 million active users; Microsoft says its Web-based has 25 million users.

Sources: comScore, eMarketer, Google, Microsoft.

Contact Brandon Bailey at 408-920-5022. Follow him at

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