From the AP:
"Last year, Microsoft encouraged kids to connect directly to "Santa" by adding firstname.lastname@example.org to their Windows Live Messenger contact lists. The Santa program, which Microsoft reactivated in early December, asked children what they wanted for Christmas and could respond on topic, thanks to artificial intelligence.
The holiday cheer soured this week when a reader of a United Kingdom-based technology news site, The Register, reported that a chat between Santa and his underage nieces about eating pizza prompted Santa to bring up oral sex."
It went downhill from there. Oddly, Microsoft doesn't suspect this was the result of an employee prank. Meaning someone consciously programmed AI Santa to discuss bj's? No wonder everyone wants to work there.