Microsoft investigated Bing GM’s ties to handbag company

Former Bing GM Danielle Tiedt

When Microsoft Bing marketing general manager Danielle Tiedt was hired by YouTube in February, Microsoft took the unusual step of saying that it had decided to “part ways” with her, independent of her decision to join a division of its archrival, Google.

Microsoft declined to say what actually happened behind the scenes. But GeekWire has since learned that one part of the story involves handbags, of all things.

A Microsoft investigation into Bing’s marketing group focused on areas including Tiedt’s connections to a high-end women’s handbag company run by her boyfriend, which was promoted by Bing in conjunction with its own marketing activities, according to people familiar with the investigation.

However, the handbags are just part of the story — a clue to the wide-ranging nature of the broader inquiry into the group and its use of Bing’s multi-million dollar marketing budget.

With the help of that marketing budget, Bing has been able to climb into the No. 2 position in the U.S. search market, with 15 percent market share, although Google still has more than 66 percent. But Bing’s gains have been costly, contributing to a loss of more than $2.5 billion in the company’s Online Services Division in the 2011 fiscal year.

On March 19, a few weeks after saying it had parted ways with Tiedt, Microsoft announced that two of her former team members, Bing marketers Sean Carver and Eric Hadley, had been terminated after an investigation. The company said they were let go “for violation of company policies related to mismanagement of company assets and vendor procurement.”

The two were known for creative marketing projects including lavish parties to promote Bing at high-profile venues and events around the country, featuring celebrities such as Jay-Z and LeBron James.

Ad Age reported last week that the investigation turned up “a list of violations” of internal Microsoft policies by Hadley and Carver – including some related to purchase orders for a three story “Bing Bar” at the Sundance Film Festival that hosted celebrities such as Drake, Jason Mraz, Paul Simon and Neil Young, with catered food and an open bar.

The events were a hit with the celebrities.

“It’s very easy to make your party decision here,” said television host Ryan Seacrest in a video interview at Sundance last year. “Wherever B-I-N-G is, that’s where you G-O. Wherever it says Bing, you go through that door. It’s always fun.”

At least one part of the inquiry into the handbags was also related to a Bing marketing event. At Fashion Week in New York last year, Microsoft staged a “Bing Lounge” where some of the featured products were from a company called Tradesrogue.

Tradesrogue, run by designer Nathaniel Smith, describes itself as an “artisan leather house.” It sells high-end women’s handbags, such as the one pictured above.

Eric Hadley and Sean Carver in a 2010 video interview at the Sundance Film Festival

Those familiar with the Microsoft investigation say Tiedt informed people inside the company about her personal connection to Smith, appearing to comply with conflict-of-interest policies.

However, Tiedt herself is also an owner of Tradesrogue, according to Washington state corporations records that list her as a member of Tradesrogue LLC, with Smith as manager. The investigation focused in part on whether Tiedt properly disclosed her own role in the handbag company.

Tiedt was hired by YouTube as vice president of marketing. A spokesman for the company declined to comment, and Tiedt and Smith haven’t responded to our messages seeking to talk with them.

The departures of Hadley, Carver and Tiedt have been enough of a soap opera to attract coverage from publications such as the New York Post. From our conversations with people at Microsoft, it’s clear that the company would rather see this story go away.

At the same time, Microsoft raised eyebrows itself by naming Tiedt’s former brother-in-law, Microsoft GM Mike Nichols, to assume additional responsibilities with her former team on an interim basis following the departure of Hadley and Carver.

Microsoft has made it clear that it encourages creative marketing as long as its internal policies are followed. And it hasn’t shied away from splashy events to promote its underdog products, such as that six-story Windows Phone that the company constructed in New York City last year.

Along the same lines, the parties and Bing-sponsored lounges at high-profile events were examples of the creative tactics tried by the Bing marketing unit over the past couple years, beyond traditional advertising and sports sponsorships. The idea was to promote the Bing brand to younger generations and others who wouldn’t normally think of using anything but Google.

  • Guest

    MS has always had lax enforcement of company procedures, at least when it comes to more senior managers. I recall one subsidiary President and a Group Director getting elected to the board of a partner company. That in itself was unprecedented at the time. But later we learned that both had invested millions in the company which later paid off >20:1 when it was taken out by another firm.  Guranteed this undeniable conflict of interest was never disclosed to anyone in Redmond. I can think of several other examples. Not excusing what these people purportedly did. Just saying that culturally this isn’t unprecendented, which makes enforcement in this case somewhat selective.

  • Paul

    It’s telling that none of the three are being forced to pay back anything or apparently charged. That hasn’t been the case in several previous incidents.

  • http://www.christopherbudd.com Christopher Budd

    Nice work, thanks for keeping on this. It’s definitely interesting to see more of what’s going on.

    Hopefully this will instill a bit of sanity around smart marketing once again. Even if there wasn’t this cloud, I find the fact that they’re spending millions of dollars on a “Bing bar” and such appalling. I mean, how many people really started using Bing because of that? I doubt Ryan Seacrest even did.

    This is the sort of nonsense that give marketing a bad name. And for this to be happening while other good, real marketers are getting laid off from Microsoft is just beyond words. How many good FTEs could that “Bing bar” have paid for?

    • Guest

      This story is about the inappropriate actions of some employees. The effectiveness of MS’s marketing, or lack thereof, is a valid but different one. On that topic, the Bing bar doesn’t seem like the most wasteful idea they have ever had. Far from it, in fact.

      • http://www.christopherbudd.com Christopher Budd

        I’d argue the two are somewhat related. Specifically, if you have an environment that is both extravagant and divorced from real results like I’d argue these campaigns are it’s much easier for inappropriate actions and deals like this to happen.

  • Guest

    As usual, MS’s shareholders are left holding the bag.

  • Insider

    There is more to the story, don’t stop now!  Keep digging…

  • Culturalcapitalism

    the reason this story resonates is that thie SH$T is widespread over at A$$Hole Mountain. People get ahead in marketing at Microsoft by kissing ass, kowtowing, then exploiting their political advantage to make big $$$’s before you’re taken out by another machiavelian A-hole.

    • Guest

      Got fired, huh?

      • Culturalcapitalism

        fired is the wrong f word…f$cked over if more accurate you smug troll :).

  • Lovelyintellect

    What ever happened to Yusuf Mehdi?  He was the SVP that managed Danielle, Sean & Eric.  Strangely, Yusuf was transferred to the Interactive Entertainment division in Microsoft, during the investigation.  It seems unlikely that he would not have known of their wrong doing.

    • Guest

      Yusuf is the ultimate political survivor. You’d have to be given his record of actual performance vs longevity.

  • Steve

    Did Microsoft serve shrimp or weenies at the Bing Bar?

  • Skiguy1000

    All
    the folks that were in Danielle/Yusuf’s in crowd had such a great run.  The great news is now that the gang of 5 is
    out of there; the team can get back to work. Given Yusuf had to approve the
    expenses of Danielle, Eric and Sean for years, I think it is only a matter of
    time before we see news on him. This gang of 5 (plus a few others) ran the Bing
    marketing team into the ground. I have never seen such a self-serving group of
    people without any value system anywhere else in MSFT. Because of their
    complete lack of integrity, values and self-awareness they actually ruined a
    handful of other people’s careers.  I am
    also blown away by the fact that a countless number of people have gone to HR to
    get help, complain of behavior, and report unjust but nothing was done until
    now.   Is the rumor true that Lisa
    Brummell’s (head of HR) girlfriend is Danielle’s aunt?  From ex-brother in-laws to girlfriends you
    would think we were living in another decade. 
    Come on Microsoft, you can do better than this…Also, and to not to be petty,
    but those hand bags are really tacky….

    • Guest

      You are correct. A relative, aunt or cousin, of Danielle’s is in fact LisaBru’s partner. As a former part of Danielle’s team I saw some very sketchy stuff going on. Happy to see this stuff coming home to roost.  

  • Beta Hector

    More material for the upcoming issue of “What Were They Thinking?!”

  • http://twitter.com/chrisisinnoho Chris Ryan

    Sounds like someone above Danielle Tiedt got all butt hurt and decided to take their revenge.

    Just look at the marketing numbers for the Bing Bar during Sundance.  I would predict they got at least 10 times the amount they invested in earned media.  The Bing Bar gave a corporate giant like Microsoft a cool factor, at least at Sundance.

    I have a feeling it was probably all started with someone high up being denied admission at the door by a security person.  It’s always something like that.

  • Percy LoJack

    As someone who worked for Danielle, AND knew her for years, I can tell you that she doesn’t abuse policies as the article alludes. She will push the envelope, but for the advancement of business objectives, not at corporate expense. Did she have a friend at MS do research on that handbag line? Maybe, but who cares? That is a nit, in the grand scheme of things. Her aunt is a Microsoft alumni, but it isnt LisaB. This is a non-story, she is in a good place with Youtube, and Microsoft is angry.

    • Left holding the bag

      Yeah, I don’t think she did anything wrong, I think she’s just clueless. As someone that also worked with her on another project, she’s basically incompetent as a manager. She must interview really well, or YouTube has low standards for marketing execs.

  • http://www.facebook.com/people/Gerard-Smith/1101468602 Gerard Smith

    What Google idiot is responsible for her hire? They should be fired!

  • nicolewiggins20

    Yusuf was transferred to the Interactive Entertainment division in Microsoft, during the investigation so all like that should be fired immediately...…!