Facebook Denies 'Smear' Campaign Against Google

May 12, 2011— -- The competition between the Internet's biggest rivals is turning bitter. After news reports earlier this week that the public relations firm Burson-Marsteller was pushing reporters to write negative stories about Google and alleged privacy violations, The Daily Beast reported Thursday that Facebook was the mystery client behind what it called a "clumsy smear" campaign.

The news website said Facebook hired the public relations firm to get people upset about Google feature called Social Circle, which lets Gmail users see information about their friends -- and friends of their friends. But the tactic backfired when a blogger approached by Burson-Marsteller concluded that Google Social Circle wasn't so sinister after all, and published his entire email exchange with the publicist. In the emails, a Burson-Marsteller staffer offered to help the blogger write an op-ed piece for a major news outlet.

In a statement, Facebook backed off charges of a sneaky strategy.

"No 'smear' campaign was authorized or intended. Instead, we wanted third parties to verify that people did not approve of the collection and use of information from their accounts on Facebook and other services for inclusion in Google Social Circles, just as Facebook did not approve of use or collection for this purpose," a spokesman said. "The issues are serious and we should have presented them in a serious and transparent way."

Regardless of how nasty the publicity push was intended to be, Dan Lyons, the reporter who broke the story for The Daily Beast, said the incident shows how high the stakes are for the two Silicon Valley stars.

"Every big player in the valley has skin in the game," he said, adding that when it comes to Facebook, "I can see how they feel under pressure and feel desperate."

The real issue isn't the potential privacy concerns connected to Google's Social Circle (which shares Facebook, Twitter and other social information already public on the Web), but Facebook's worry that Google is crossing over into Facebook's social space, Lyons said.

"They're really pissed that Google's basically taking their stuff and trying to build a kind of social graph of their own," he said.

In emails published by Christopher Soghoian, the blogger approached by Burson-Marsteller, a publicist says Google is "not only violating the personal privacy rights of millions of Americans, they are also infringing on the privacy rules and rights of hundreds of companies."

The publicist also offers to "assist in the drafting" of the op-ed and target the Washington Post, Politico and other high-profile media outlets.

In a statement, Burson-Marsteller confirmed that Facebook was the client behind the Google campaign and said the Facebook wanted to withhold its name from the media because it was "merely asking to bring publicly available information to light and such information could then be independently and easily replicated by any media."

Still, the firm said its actions were "not at all standard operating procedure" and that they should have declined the assignment on those terms.

The Facebook PR blunder drew criticism from across the blogosphere, including a post from TechCrunch founder Michael Arrington.

In a blog titled, Facebook Loses Much Face in Secret Smear on Google, he wrote, "It lets the tech world know that Facebook is scared enough of what Google's up to to pull a stunt like this. Facebook isn't supposed to be scared, ever, about anything. Supreme confidence in their destiny is the the way they should be acting."

Facebook vs. Google: 'Whisper Campaigns' Are Risky Tactic, Expert Says

It also makes it difficult to trust the company if they show a willingness to "engage in cowardly behavior in battle," he said. While some of the criticisms against Google might be valid, he said this latest incident means that the story becomes Facebook's folly -- not alleged privacy violations by Google.

Irving Schenkler, a professor at New York University's Stern School of Business, said that because so-called "smear" or "whisper" campaigns can easily backfire, they can be very chancy for companies.

"It's not a strategy, it's a tactic," he said. "It can really come back to bite a company in a very severe way."

While companies may frequently hire public relations firms to encourage reporters to write stories favorable their cause (and negative to the competition's), Schenkler said, "The innuendo is what characterizes the whisper."

Negative campaigns have tarnished the reputations of the companies connected to them in the past, he said, but it's possible that Facebook will emerge largely unsullied.

"It depends on who you are, what your value proposition is and how you're trying to position yourself and who's likely to hear this," he said. "In terms of who's using Facebook, I'm not sure it's going to be a big matter at all."