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Wednesday, May 14, 2003 - Page updated at 12:00 AM

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Microsoft comes clean on iLoo

Seattle Times technology reporter

Microsoft admitted yesterday that it may have misled the public about its quirky plan to install an Internet kiosk and surround-sound speakers in a British portable toilet.

The "iLoo" project became the butt of jokes around the world after it was disclosed two weeks ago.

On Monday the company said it was just a joke. Then yesterday it changed the story and said iLoo was a real project, but executives killed it after reading the news coverage.

Now the company has a credibility problem as well as a red face.

"They're in a no-win situation now because the reader will say, 'Gee, either they made something up or they don't know what they're talking about' — both of them definitely affect credibility," said Dean Kruckeberg, a communications professor and public-relations-ethics expert at the University of Northern Iowa in Cedar Falls.

Microsoft acknowledged yesterday that it goofed up.

"We apologize for our mistake and are working on making sure it doesn't happen again," said Lisa Gurry, MSN group product manager in Redmond.

Here's how the story unfolded.

Two weeks ago Microsoft's MSN division in the United Kingdom announced plans to equip a portable toilet with a computer, waterproof keyboard, wireless Internet connection, surround-sound speakers and plasma-screen display on the exterior.

The kiosk was to be used at music festivals this summer in England.

In years past the division equipped a park bench and a beach chair with wireless Internet access to encourage people to try MSN services.

Other companies provide digital advertising displays in urinals so the concept wasn't too far-fetched, but it still drew potty jokes such as the one about Microsoft's new Pee-C.

After a few weeks of wisecracks, Microsoft's spokesmen on Monday said the iLoo was a joke.

"I can confirm it was an April Fools' joke," Noury Bernard-Hasan, a director in the public-relations division, told the CNET news Web site.

Yesterday the company revised its story. Gurry explained to reporters that it was real, and the U.K. group has leeway to do its own projects, but that executives in Redmond decided the iLoo was inappropriate.

"It didn't really map to our global branding objectives," Gurry said.

She said David Cole, senior vice president for MSN, made the final call.

Microsoft has had other problems with its promotional campaigns.

In 2000 and 2001 the Federal Trade Commission found the company had run deceptive ads promoting handheld computers and its WebTV service.

In an effort to burnish the company's reputation after those missteps and the antitrust case, Chief Executive Steve Ballmer last June added integrity to the list of criteria used to rank employees' performance.

Gurry said the problem this week was miscommunication. A spokesman on Monday made an "ad hoc" comment that was repeated by another spokesman later in the day, she said.

"Across the board I think you have a lot of well-intentioned folks that tried to come up with kind of a clever marketing campaign and then some miscommunication that occurred internally," she said.

"We're definitely going to make sure we work on our communications processes so this doesn't happen again."

Nobody will be fired or disciplined over the iLoo affair, however, spokeswoman Stacy Drake said yesterday.

Meanwhile, a British law student claims Microsoft stole his idea.

Andrew Cubitt said he developed the iLoo Internet kiosk in a toilet stall — complete with a toilet-paper printer — in 2001.

Microsoft said it was looking into his claims and had no immediate comment.

By calling its iLoo a joke, the company raised Cubitt's suspicions, he said by e-mail.

"This has essentially discredited my design and potentially stopped any chance of it entering the market," he said, "as it will always be seen as either the Microsoft product, or just another joke."

Brier Dudley: 206-515-5687 or bdudley@seattletimes.com

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