Facebook admits running campaign against Google

update Social networking site hires PR firm to highlight "serious" privacy issues in Google's Social Circles feature, in move which seems to indicate company is fearful of strong competitors, observes industry marketeer.

update Social networking giant Facebook has owned up to hiring a public relations consultancy to expose supposed flaws in Google's privacy practices, in a move that seems to indicate the company is fearful of its strongest competitors, notes an industry marketeer.

According to various online reports that mushroomed late Thursday after USA Today first broke the news, Burson-Marsteller confirmed it was hired to run a smear campaign in which major news outlets would be sent pitches highlighting potential privacy and legal issues involving Google's social networking service, Social Circles. The feature enables users to view information publicly available of other users who are connected to their Google Chat and Contacts, and includes data such as Facebook accounts, Twitter feeds and personal Web sites.

The bitter rivalry between the two Internet giants was never a secret, where both companies fought over how much user data each was willing to share with the other, for instance, by allowing Facebook users to automatically import their Gmail contacts.

In a move that further intensified the rivalry, Google last month launched a new social networking feature, "+1", which industry watchers noted was bore similarities with Facebook's "Like" button. The +1 function provides users a way to recommend search results to friends.

Before Microsoft's Skype buyout earlier this week, both companies were also reportedly contemplating a deal with the videoconferencing provider.

Ryan Lim, business director of Singapore-based social media marketing agency, Blugrapes, said the latest development is unlikely to have any immediate impact on Facebook users and in the advertising industry, as media plans are based on ability to effectively reach consumers rather than the media's credibility in the market.

However, he noted that "such covert actions and smear approach" could be interpreted as the company's fear of its competitors, especially those that pose a serious threat.

"Investors of Facebook may have something to worry about today that they cannot match up to Google," Lim told ZDNet Asia in an e-mail. "The general public may also eventually take this in a more negative light to assume that Facebook is very competitive in its business approach, to the extent that it would resort to smear FUD (fear, uncertainty, doubt) tactics just to achieve its goals."

For a company that already handles so much of its users' personal data, he added that there will be some "eroding of trust" among consumers.

In defense of user privacy
Facebook, however, said it launched the campaign in a bid to highlight "serious" privacy issues in Google's social networking features.

In a pitch to a blogger sent last week with the subject, "Google quietly launches sweeping violation of user privacy", Burson-Marsteller said: "Google is collecting, storing and mining millions of people's personal information from a number of different online services and sharing it without the knowledge, consent or control of the people involved... The American people must be made aware of the now immediate intrusions into their deeply personal lives Google is cataloging and broadcasting every minute of every day, without their permission."

Late Thursday, Dan Lyons from The Daily Beast reported that a Facebook spokesperson confirmed the company had initiated the PR campaign because it believed Google's social networking efforts raised privacy concerns and that it was using Facebook data to support these initiatives.

According to ZDNet Asia's sister site CNET News, a Burson-Marsteller spokesperson said: "Now that Facebook has come forward, we can confirm we undertook an assignment for that client. The client requested its name be withheld on the grounds that it was merely asking to bring publicly available information to light and such information could then be independently and easily replicated by any media."

In a statement to CNET, the social networking site defended its move, noting that Google's Social Circles posed a problem for its users, but admitted it could have managed the situation differently. "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 service for inclusion in Google Social Circles--just as Facebook did not approve of use or collection for this purpose.

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

Lim, though, believes Facebook will recover from "this slight hiccup" over time, having already made the first step in repairing its image by owning up to the PR campaign. This indicated its readiness to take responsibility for its actions, he said, but noted that an apology would have been the best step to take. The social networking site could also have publicly pledged not to repeat such actions, he added.

"As a high profile company, it should learn to take the high road in dealing with such issues. While it is natural to have concerns over its competitors, it needs to have a public policy and process on how this can be handled in an acceptable manner. It should not be involved with future petty squabbles and covert actions," he said. "Facebook needs to mature and show that it has grown up correctly with the right business ethics. It should not show that as a company, it has lots to hide [and] needs to show that it can do the right thing."

Facebook itself had faced the wrath of privacy advocates last year when it introduced several changes to its privacy policies and to the way it handled user data. In February 2011, it said it was seeking user comments on new efforts to redesign and reorganize its privacy policy.

Though contacted, Google declined to comment.