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Facebook-Google rivalry intensifies with PR fiasco

By Barbara Ortutay

Associated Press

Published: Thursday, May 12 2011 10:32 p.m. MDT

FILE - This Jan. 3, 2011 file photo shows the exterior of Facebook headquarters in Palo Alto, Calif. The intense rivalry between Facebook and Google The intense rivalry between Facebook and Google just got juicier as characters behind the latest Silicon Valley drama evoked talk of smear campaigns, secret clients and even Richard Nixon. It took a once-secret blogger, known as Fake Steve Jobs, to help sort it all out.

Paul Sakuma, Associated Press

Enlarge photo»

NEW YORK — 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.

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