Fox has lost Microsoft as the exclusive sponsor of its upcoming Family Guy variety special after the software company's executives watched the show's taping.

Earlier this month, the companies announced they were teaming for an unprecedented collaboration on Family Guy Presents: Seth & Alex's Almost Live Comedy Show, a special set to air November 8 during Fox's popular Sunday animated block. Instead of traditional commercials, the special was to feature creative promotion of Microsoft's latest operating system, Windows 7, woven into the show's content.

Then executives watched the animated show in a live taping before a studio audience. Here's a statement from Microsoft:

We initially chose to participate in the Seth and Alex variety show based on the audience composition and creative humor of 'Family Guy,' but after reviewing an early version of the variety show it became clear that the content was not a fit with the Windows brand. We continue to have a good partnership with Fox, (series creator and writer) Seth MacFarlane and (co-star and writer) Alex Borstein and are working with them in other areas. We continue to believe in the value of brand integrations and partnerships between brands, media companies and talent.

The special reportedly contained jokes about deaf people, the Holocaust, feminine hygiene and incest. In other words, it was just like a regular Family Guy episode.

A 30-second ad during Family Guy costs about $214,750. Buying an entire half-hour special during sweeps doubtless put the Microsoft deal into the millions.

Fox plans to move forward with another integrated sponsor, though it's unclear how this will work since the network's live taping included Windows 7-related humor.

Software Microsoft