Burson-Marsteller is a PR firm with close ties to the Clintons. CEO Mark Penn was Hillary Clinton's 2008 presidential campaign strategist. The firm now has been humiliated after it was revealed that Facebook secretly paid it off to attack Google.  (Source: PRNewser)

The outlandish attack is a facepalm worthy botch job for Facebook.  (Source: Getty Images)
The world's largest internet site is rocked by scandal

With over 600 million active users, Facebook is an industry juggernaut.  It recently snatched the title of most-used website from veteran search giant Google Inc. (GOOG), who is faced with antitrust and privacy accusations.

Not surprisingly, Google and Facebook have been increasingly butting heads as both companies try to encroach on each other's online territories.  But even amid that backdrop, Facebook's latest move may seem particularly shocking and audacious to some -- it secretly hired a public relations firm to trash Google, spreading questionable attack stories about its rival.

I. Google -- a Social Network?

The story began when Google announced a tool called Social Circle, which essentially transformed the company's popular Gmail email service into a social network.  Previously, Gmail users could see information about their friends only.  With Social Circle, friends of friends also became visible, and new types of information were presented.

Among that information was content from Facebook.  Much like Google did with its Google News syndication service, it merely mastered scraping/collecting this information -- it was not hosting the first hand posts.

Ultimately, Google's ability to grab Facebook users' data so easily, is largely thanks to Facebook's own permissive design, which exposes a great deal of information without careful configuration of your account settings.  Mark Zuckerberg, CEO of Facebook, recently gave the now infamous opinion that users' just don't care about privacy.

But Facebook did care that Google was taking its info and using it to create a new social network of sorts.  A Facebook spokesperson is quoted by Business Insider as saying, "We are concerned that Google may be improperly using data they have scraped about Facebook users."

(Google responded that it was unaware of this concern and was looking into it.)

II. Secret Attack

Now if that were the end of the story, Facebook would be seemingly in the clear.  But those remarks came only after the company executed a very different kind of strategy to attack its foe.

Facebook hired Burson-Marsteller, a veteran 58-year-old PR firm.  The company's CEO, Mark Penn, had worked as a political consultant for former U.S. President Bill Clinton and was the chief strategist for Hillary Clinton's failed 2008 presidency bid.  The firm itself was among the best known firms in Silicon Valley.

But with their reputation on the line they amazingly agreed to participate in an audacious scheme to try to stir up the online news community, spreading questionable stories accusing Google of privacy violations.

Completely forgetting to mention Facebook's concerns about its proprietary information being scraped or the fact that it was working for Facebook, Burson-Marsteller employees reached out to their journalist contacts and tried to sell them on a story that Social Circle was violating users' privacy.

They wrote:

[Social Circle is] designed to scrape private data and build deeply personal dossiers on millions of users—in a direct and flagrant violation of [Google's] agreement with the FTC. 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.

Now bear in mind, all Google was doing really was exposing secondary users' information -- similar to what Facebook does on a daily basis.  And the service was an opt-in, with only customers choosing to participate having their info shared.  In other words, Facebook's agents glossed over the real story -- that Facebook was unhappy with Google for scraping its data -- and instead manufactured a largely contrived story about "privacy" violations.

That scheme seems particularly ironic, given Facebook's own glaring privacy issues of past and present.

III. Plan Blows up in Facebook's Face

Like most ill advised schemes, the plot by Zuckerberg and Company (or more likely, Facebook PR boss Elliot Schrage) did not play out well.

Among those they contacted was Chris Soghoian, a Ph.D candidate at the University of Indiana and famous tech blogger.  No stranger to controversy Mr. Soghoian was intrigued by the supposed story, so he dug into it.

But as he investigated the story, he smelled a rat.  As he said, Burson-Marsteller was "making a mountain out of molehill".  So what was their real agenda?

He was determined to find out.  He began probing the firm about who had employed them to share this information.  Burson-Marsteller refused to say.  So Mr. Soghoian published the entire dialogue between him and the PR firm online.

At that point Burson-Marsteller perhaps should have seen the writing on the wall and decide to cool off the current attacks and plot a new campaign.  Instead, though, they chose to forge ahead, going for bigger fish.

The campaign really imploded when former CNBC tech reporter Jim Goldman, and John Mercurio, a former political reporter, pitched the story to USA Today.  

The publication investigated the claims and, like Mr. Soghoian, found them to be mostly untrue.  At that point they became suspicious.  Why was this PR firm pushing so hard?  

They tried to get information from the firm, itself, but their contacts clammed up.  Writes the publication, "After Goldman’s pitch proved largely untrue, he subsequently declined USA Today’s requests for comments."

USA Today published a story revealing that a top-level PR firm was attacking Google in an apparent smear campaign.  The story was now drawing some real attention.  But no one knew who was truly behind the campaign.  Fingers initially pointed at Microsoft Corp. (MSFT) or Apple, Inc. (AAPL) -- rivals of Google's in the smart phone, search, advertising, and operating businesses.

But eventually several publications discovered that it was Facebook who paid off Burson-Marsteller.  That development was first reported by Dan Lyons of The Daily Beast.

The full story of Facebook's campaign has now been exposed and the tables have turned.  For some -- particularly those who watched the unflattering portrayal of the site's leadership in the movie The Social Network -- these developments may not surprise.  But for the vast majority of the public, this comes as quite a shock and represents one of the internet's golden boys losing a bit more of its luster.

And all of this just goes to show -- secrets seldom stay secret in the internet era -- particularly juicy corporate ones.  Perhaps Facebook has learned this lesson, which -- of all sites -- it should have known already.

"I want people to see my movies in the best formats possible. For [Paramount] to deny people who have Blu-ray sucks!" -- Movie Director Michael Bay

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