Microsoft abandons 'Scroogled' campaign (updated)

March 4, 2013: 3:39 PM ET

Just because Microsoft is moving beyond its rather nasty anti-Google campaign doesn't necessarily mean the campaign was a flop.

scroogledFORTUNE -- Microsoft is reportedly abandoning its highly negative anti-Google campaign, "Scroogled." It's hard to know whether the decision has anything to do with the immense backlash that occurred in the media, because the campaign wasn't working, or both.

The campaign darkly asserted that Google (GOOG) is monitoring your private emails—which it is, but not for any sinister purpose. (At least, none we know of.) It does so to target ads based on keywords in emails. If you write to your uncle Leo that you're "looking for a new car," maybe you'll see some car ads. Microsoft's (MSFT) ads asserted that "they" (meaning Google) "go through" your email, which conjured images of Google employees reading private messages. But of course, it's all done with software.

While Microsoft isn't repudiating the campaign, meant to support its own email service, Outlook.com, the company is apparently moving beyond it. "That part is about finished," Stefan Weitz, Microsoft's senior director of online services, told the San Francisco public media station KQED. The Scroogled Web site remains online. 

Update: A Microsoft spokesperson late Monday denied that the campaign is being abandoned and said it it simply moving into a new phase. "Scroogled will go on as long as Google keeps Scroogling people," the spokesman said in an email. "We know Google doesn't like it when the facts come out. Chapter two of the consumer education campaign has shown people care about their privacy. More than 3.5 million people visited scroogled.com, and nearly 115,000 people signed a petition asking Google to stop going through their Gmail. Stay tuned for the next chapter." There's that "going through" phrase again.)

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KQED asserted that "if Microsoft hoped its campaign would win it a greater share of the market for Internet search or webmail, it looks like a pretty big flop. Data from market research suggests that users of Google search and Gmail shrugged off the onslaught." "Flop" seems like a strong word, though, given that the campaign had only been running for a few weeks. It's possible that that the message got through to people who might understandably be concerned about privacy, but those people haven't fully made the switch yet. Microsoft based the campaign on the fact that most people don't realize that their email is being "read," even if it's only by software. After all, look how often your uncle Leo complains, on Facebook (FB), about Facebook's privacy policies, which many people consider to be disturbingly intrusive. And the campaign certainly drew attention, even if it hasn't (yet) yielded an immediate boost for Outlook. Depending on what Microsoft has in store now, Scroogled might turn out to be a strong cornerstone for its marketing campaign for its email.

KQED also says that by one measure, the campaign could be viewed as a success: the petition that the ads directed people to has collected nearly 115,000 signatures. Microsoft had set 25,000 as a goal -- but of course the company set that goal low on purpose knowing it would be surpassed. Given the ad blitz, which included TV spots as well as social-media ads, 115,000 doesn't seem all that impressive.

As Fortune reported two weeks ago, the site where the petition appeared, Care2, is rethinking its policies in light of the Scroogled campaign. Care2 is meant for causes that are at least partly in the public interest, and not for "causes" that are clearly 100 percent commercial. A Microsoft spokesman said that email privacy is a "serious public privacy issue that a lot of people care about."

But perhaps not as many as the company had hoped.

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