Facebook caught starting smear campaign about Google

The intense rivalry between Facebook and Google just got juicier.

In a twist seemingly out of a Hollywood thriller, Facebook hired a prominent public relations firm to try to plant stories harshly criticizing Google's privacy practices in leading news outlets. The efforts backfired when the firm approached a blogger who not only declined the assignment, but also went public with the offer.

The latest Silicon Valley drama has also evoked chatter of smear campaigns, secrecy and even Richard Nixon. It took the once-secret blogger known as Fake Steve Jobs to help sort it all out.

One lesson: If you're going to write an incriminating email, don't. Pick up the phone instead.

Here's another:

"If you are out there planting negative stories, you are feeding the conflict," said Larry L. Smith, president of the Institute for Crisis Management, a public relations company. "When they get in a shoving match, whoever is perceived by the public to be the bully loses in the public eye."

Rather than getting news outlets to circulate stories about privacy problems facing Google, Facebook found itself having to answer questions about why it wanted to maintain secrecy.

Facebook said it never authorized or intended to run any smear campaign against Google. Rather, the company said it hired Burson-Marsteller to prompt investigations into how a new Google service called Social Circle collects and uses data about people. In a statement, Facebook said it should have made it clear that it was behind the efforts.

Burson-Marsteller said Facebook had requested that its identity remain secret "on the grounds that it was merely asking to bring publicly available information to light." The firm said that violated its own policies, "and the assignment on those terms should have been declined."

Not that it was.

Facebook's efforts to stay anonymous — something that violates the terms of service for users of its site — began to unravel when Burson-Marsteller contacted blogger Christopher Soghoian, an Indiana University graduate student well known in online privacy and security circles.

The firm's John Mercurio asked Soghoian if he wanted to write an item for "a top-tier media outlet" blasting Google for what Mercurio calls a "sweeping violation of user privacy." Soghoian asked for the identity of the firm's client, but Mercurio wouldn't reveal it. Soghoian then posted the email exchange online.

Burson-Marsteller, meanwhile, also pitched USA Today. Instead of running with the planted story, USA Today published an article on the "PR firm's attack of Gmail privacy."

It took Newsweek tech editor Dan Lyons to figure out that Burson-Marsteller's mystery client was not Apple or Microsoft, as some murmurs went, but Facebook.

Lyons, incidentally, is the writer behind The Secret Diary of Steve Jobs, a sharp-witted blog pretending to be written by Apple's CEO. Lyons used to go by Fake Steve Jobs, but The New York Times outed him in 2007. (The blog is on hiatus out of respect for Jobs, who is on medical leave.)

"The mess, seemingly worthy of a Nixon re-election campaign, is embarrassing for Facebook, which has struggled at times to brand itself as trustworthy. But even more so for Burson-Marsteller, a huge PR firm that has represented lots of blue-chip corporate clients in its 58-year history," Lyons wrote in the Daily Beast, a website owned by the same company as Newsweek.

And so, people got a rare glimpse inside Facebook's thorny relationship with Google in a story that seems more befitting to behind-the-scenes Washington politics or rival pizza joints than the sparring between two seemingly friendly tech giants.

It was also a good lesson on privacy in an age in which few things stay out of the public eye.

"Odds are that if you are writing about something controversial, or doing something controversial, someone is going to leak it," said Smith, the crisis-management expert.

Google and Facebook are Silicon Valley neighbors with similar scrappy roots as startups.

Over the past few years, however, they have grown more competitive. Google is dominant in advertising that accompanies search results, but Facebook has the potential to draw ad dollars with its extensive knowledge of people's interests and social circles. With little success, Google has urged Facebook to make its data more accessible to its search engine.

Facebook also has successfully lured scores of Google's engineers and executives, a key reason Google gave its staff a 10 percent raise this year.

The PR fiasco was prompted by Google's Social Circle, which is part of the company's efforts to supplement search results with content from your Facebook, Twitter and other online connections.

Facebook, no stranger to privacy mishaps, criticizes Google for collecting and storing Internet users' information without their knowledge or consent.

But even the most ardent privacy advocates are dubious Google is doing anything all that bad with Social Circle.

Marc Rotenberg, executive director of the Electronic Privacy Information Center, said there are far more pressing privacy issues. They include Google's mapping service with street-level photography and Facebook's tendency to encourage people to share more than they think they're sharing. EPIC also objects to the tracking of people's location through mobile devices.

Facebook acknowledges that it could have handled the matter better.

"The issues are serious and we should have presented them in a serious and transparent way," the company said.

Google did not respond to messages for comment. Nor did Mercurio and Jim Goldman, the Burson-Marsteller employees behind the Facebook campaign. The blogger, Soghoian, confirmed the email exchange and said, "I don't write things for other people."

Lyons would not disclose how he figured out the identity of Burson-Marsteller's mystery client. As forFacebook's response that it didn't intend a smear campaign, he only wrote:

"I don't think there's any reason not to take them at their word, right? Oh wait."