Microsoft-Google war goes thermonuclear

Software giant Microsoft has kicked off a nasty marketing war directly against Google and ended any pretence of niceness between the pair. The Vole has released a series of attack ads in the US which have upped the ante considerably in its trade war against Google which began five months ago.

The ads, which have appeared online, on television and in print, show Google is duplicitous and more interested in increasing profits and power than protecting people’s privacy and providing unbiased search results.The anti-Google ad campaigns are the brain child of former political operative Mark Penn who is a corporate strategist who reports directly to Microsoft CEO Steve “there is a kind of hush” Ballmer. 

Penn is a former pollster for President Bill Clinton and was campaign strategist for Hillary Clinton’s unsuccessful bid for president in 2008. Penn left his job as CEO of public relations firm Burson-Marsteller to help Microsoft generate more usage of its Bing search engine and other online services.

In the adverts Microsoft vilifies Google for sharing personal information it gathers about people who buy apps designed to run on smartphones and tablets powered by Android. This is a step up from earlier ads which skewered Google’s long-running practice of electronically scanning the contents of people’s Gmail accounts to help sell ads.

Greg Sullivan, Microsoft’s senior manager for Windows Phone, said that his company had a better alternative that doesn’t do these kinds of nefarious things.  Negative advertising is not seen much in Europe and according to AP it is only the underdog who needs to use it. But it also highlights how Google has evolved from an endearing internet start-up to a scary corporation which looks too closely at personal data. Microsoft can get away with its adverts because Google has been caught several times and copped regulatory fines, settlements and embarrassment all over the world.

Ironically it is now Google which is facing complaints that its practices are anti-competitive, while Microsoft is depicted as fighting for a freer market. This week a group of companies led by Microsoft said it has asked European authorities to investigate whether Google is acting unfairly by giving away its Android to mobile device manufacturers on the condition that Google’s own apps, such as YouTube and Google Maps, are installed and prominently displayed. This is exactly what Microsoft was accused of in its browser anti-trust cases years ago.

Microsoft’s latest ads only repeat concerns already raised by privacy watchdogs.  Lately they have been complaining that Google hasn’t adequately disclosed that customers’ names, email addresses and neighbourhood locations are routinely sent to the makers of apps sold in Google’s online Play store. Consumer Watchdog has complained to the US Federal Trade Commission that Google’s apps practices represent an “egregious privacy violation”. In its defence, Google says it shares a limited amount of personal information about customers to ensure they get better service and faster responses if any problems arise.

They claim that the practice is allowed under its terms of service, although it is worthwhile pointing out that the EU is likely to rule this document as illegal. All this means that Microsoft, of all companies, can take the high ground and promise that it doesn’t pass along personal details about customers buying apps for devices running its Windows Phone. But it is also telling the world+dog that Microsoft is well behind Google.

It seems a long time ago that Microsoft chief executive Steve Ballmer dismissed Google as a one-trick pony that hadn’t proven adept at doing anything besides searching the web and selling ads next to the results. Microsoft has tried to thwart Google by investing heavily in online services but not done as well. Vole’s online division has accumulated more than $17.5 billion in operating losses. The losses include an accounting charge of more than $6 billion for Microsoft’s acquisition of aQuantive, an online advertising service that was a turkey.

At the moment Google processes about two out of every three search requests in the US and handles an even larger percentage of queries in many parts of Europe. Google’s market value has soared from nearly $25 billion at the time of its initial public offering (IPO) to $255 billion.

Meanwhile Vole’s market value has fallen by about 20 percent during the same period. After the latest advertising campaign kicked off, Microsoft’s stock gained 1.3 percent, to $28.95, while Google’s increased $6.85 to $781.70.