Microsoft assault on Google shows industry shift

This is a scene from the latest in

This is a scene from the latest in a series of scathing Microsoft ads against Google. (Credit: AP)

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SAN FRANCISCO -- Microsoft is skewering Google again with ads and regulatory bashing that say as much about the dramatic shift in the technology industry's competitive landscape as they do about the animosity between the two rivals.

The ads that began Tuesday mark the third phase in a 5-month-old marketing campaign Microsoft Corp. derisively calls "Scroogled." The ads online, on television and in print, depict Google as a duplicitous company more interested in profits and power than protecting people's privacy and providing unbiased search results.

This time, Microsoft is vilifying Google Inc. for sharing some of the personal information it gathers about people who buy applications to run on smartphones and tablet computers powered by Google's Android software. Earlier ads have ripped Google's long-running practice of electronically scanning the contents of people's Gmail accounts to help sell ads.

"We think we have a better alternative that doesn't do these kinds of nefarious things," said Greg Sullivan, Microsoft's senior manager for Windows Phone, the business taking aim at Google's distribution of personal information about buyers of Android apps.

As Microsoft hit Google in the United States, a group led by Microsoft asked European authorities to investigate whether Google has been using its free Android system to stifle competition. One rival is Microsoft's Windows Phone system.

The barbs on both sides of the Atlantic could backfire. Even as they help draw attention to Google practices that may prod some consumers to try different services, they also serve as a reminder of Microsoft's mostly futile -- and costly -- attempts to trump its rival with more compelling technology.

"It's always the underdog that does negative advertising like this, and there is no doubt that Microsoft is now the underdog," said Jonathan Weber of search consulting firm LunaMetrics.

Despite repeated management assurances about respecting personal privacy, Google has experienced several lapses that have resulted in regulatory fines and settlements.

Tuesday, the Microsoft-led FairSearch group complained that Google has acted unfairly by requiring device makers relying on its Android software to install an entire suite of Google's mobile services even if they just wanted one or two apps, such as Google Maps or YouTube. That still hasn't prevented device makers from redesigning Android to suit their own purposes. Amazon.com Inc., with its Kindle Fire, and Barnes & Noble Inc., with its Nook tablets, are among the companies selling Android products that don't feature Google services.

Microsoft's latest ads revolve around concerns raised by privacy watchdogs. Critics argue Google hasn't adequately disclosed that customers' names, email addresses and neighborhood locations are routinely sent to the makers of apps sold in Google's online Play store.

Google says it shares a limited amount of personal information about Android apps customers to ensure they get better service and faster responses if any problems arise. The company says the practice is allowed under its terms of service -- a document that most people rarely read in its entirety.

Microsoft says it doesn't pass along personal details about customers buying apps for devices running its Windows Phone software. But there aren't as many Windows Phone users or apps for that system as there are for Android.

The changing fortunes of Microsoft and Google have been reflected in the stock market's appraisal of the two companies.

Google's market value has soared from nearly $25 billion at the time of its initial public offering in 2004 to nearly $260 billion. Microsoft's market value has fallen by about 17 percent during the same period, declining from nearly $300 billion at the time of Google's IPO to $249 billion today. Both are smaller than rival Apple Inc., with a market value hovering around $400 billion.

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