The social network secretly hired a PR firm to plant negative stories about the search giant, The Daily Beast's Dan Lyons reveals—a caper that is blowing up in their face, and escalating their war. Plus, more on the ensuing blame game and the PR hacks who did the job. 
 
 
 
 For the past few days, a mystery has been unfolding in Silicon Valley. Somebody, it seems, hired Burson-Marsteller, a top public-relations firm, to pitch anti-Google stories to newspapers, urging them to investigate claims that Google was invading people’s privacy. Burson even offered to help an influential blogger write a Google-bashing op-ed, which it promised it could place in outlets like The Washington Post, Politico, and The Huffington Post. 
 
 The plot backfired when the blogger turned down Burson’s offer and posted the emails that Burson had sent him. It got worse when USA Today broke a story accusing Burson of spreading a “whisper campaign” about Google “on behalf of an unnamed client.” 
 
 But who was the mysterious unnamed client? While fingers pointed at Apple and Microsoft, The Daily Beast discovered that it's a company nobody suspected—Facebook. 
 
 Confronted with evidence, a Facebook spokesman last night confirmed that Facebook hired Burson, citing two reasons: first, it believes Google is doing some things in social networking that raise privacy concerns; second, and perhaps more important, Facebook resents Google’s attempts to use Facebook data in its own social-networking service. 
 
 Like a Cold War spy case made public, the PR fiasco reveals—and ratchets up—the growing rivalry between Google and Facebook. Google, the search giant, views Facebook as a threat, and has been determined to fight back by launching a social-networking system of its own. So far, however, Google has not had much luck, but Facebook nonetheless felt it necessary to return fire—clandestinely. 
 
 Here were two guys from one of the biggest PR agencies in the world, blustering around Silicon Valley like a pair of Keystone Kops. 
 
 Facebook hired a private PR company to plant negative Google stories in the press. Credit: AP Photo 
 
 At issue in this latest skirmish is a Google tool called Social Circle, which lets people with Gmail accounts see information not only about their friends but also about the friends of their friends, which Google calls “secondary connections.” Burson, in its pitch to journalists, claimed Social Circle was “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.” 
 
 Also from Burson: “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.” 
 
 Chris Soghoian, a blogger Burson offered to help write an op-ed, says Burson was “making a mountain out of molehill,” and that Social Circle isn’t dangerous. 
 
 Soghoian asked Burson directly what company was paying the agency to spread this stuff around. Burson wouldn’t say. Miffed, Soghoian published their email exchange online. You can see it here. 
 
 The story gained wider attention when USA Today reported that two PR flacks from Burson—former CNBC tech reporter Jim Goldman, and John Mercurio, a former political reporter—had been pushing reporters at USA Today and other outlets to write stories and editorials claiming Google was violating people’s privacy with Social Circle. 
 
 USA Today looked into it, but decided the claims were exaggerated—at which point, Goldman ran for cover. “After Goldman’s pitch proved largely untrue, he subsequently declined USA Today’s requests for comments,” the paper reported. 
 
 The mess, seemingly worthy of a Nixon reelection 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. Mark Penn, Burson’s CEO, has been a political consultant for Bill Clinton, and is best known as the chief strategist in HIllary Clinton’s 2008 presidential campaign. ||||| Google deflects PR firm's attack of Gmail privacy 
 
 It's not as if Google lacks privacy controversies to quell. 
 
 Yet Burson-Marsteller, a top-five public relations firm, is attempting to pile more on. 
 
 Burson last week stepped up a whisper campaign to get top-tier media outlets, including USA TODAY, to run news stories and editorials about how an obscure Google Gmail feature —Social Circle— ostensibly tramples the privacy of millions of Americans and violates federal fair trade rules. 
 
 Google said that Social Circle in fact allows Gmail users to make social connections based on public information and private connections across its products in ways that don't skirt privacy. 
 
 Yet the PR stunt played out during a week in which Google was responding to a raid of its Seoul office by South Korean privacy regulators and was preparing for a U.S. Senate hearing today over the location-tracking feature in Android smartphones. 
 
 Pushed by two high-profile media figures — former CNBC news anchor Jim Goldman and former political columnist John Mercurio, both of whom recently joined Burson — the whisper campaign illustrates how privacy has become a lightning-rod issue. Goldman pitched the Social Circle issue as a huge privacy breach to Google users and an important story for consumers. 
 
 "Privacy issues are certainly complex," says Maneesha Mithal, associate director of the Federal Trade Commission's Division of Privacy and Identity Protection. 
 
 Burson's efforts, on behalf of an unnamed client, also highlight the delicate balancing act Google, Microsoft, Facebook and Apple face as they rush to profit from cutting-edge Internet services that tap into consumer data. Several pioneering privacy rights bills are gaining steam in Congress and in California. And Sen. Al Franken, D-Minn., chairs today's hearing, where he is expected to grill executives from Apple and Google about how iPhones and Android smartphones keep precise track of each user's whereabouts every day. 
 
 The tech giants "need to ensure that consumers understand their data is being accessed and used with proper controls to ensure its protection," says Dan Hoffman, a mobile security expert at networking company Juniper. 
 
 Google, however, often pushes out new consumer services that affect privacy without clearly conveying what the technology does. 
 
 Earlier this year, it reached a settlement with the FTC for exposing Gmail users' contacts as part of an ill-fated launch of its Buzz social network in February 2010. 
 
 And it faces probes in several nations and U.S. states for dispatching fleets of specially equipped cars through city streets to harvest data from wireless networks in homes and businesses. 
 
 "Much of Google's privacy problems stem from the company's culture," says John Simpson, spokesman for the non-profit Consumer Watchdog. "They hire like-minded engineers who push the creepy line, then apologize when they get caught with their fingers in the cookie jar." 
 
 Against this backdrop, Goldman and Mercurio began engaging reporters and technologists about Social Circle, casting it as a stealthy feature circulating potentially embarrassing information among Gmail users in ways that violate FTC rules. 
 
 In a May 3 e-mail to former FTC researcher and blogger Christopher Soghoian, Burson's Mercurio offered to ghost write an op-ed column to that effect for Soghoian. Mercurio even offered in a widely circulated e-mail to help Soghoian get it published in The Washington Post, Politico, The Hill, Roll Call and The Huffington Post. 
 
 Meanwhile, Goldman connected with USA TODAY and outlined a news story critical of Social Circle. 
 
 However, Soghoian derailed Burson's efforts by posting the full e-mail text of Mercurio's pitch — along with his rejection — on the Internet. After Goldman's pitch proved largely untrue, he subsequently declined USA TODAY's requests for comment. 
 
 Meanwhile, Google began fielding media calls about the heretofore obscure Social Circle. The company acknowledges reviewing Mercurio's pitch. 
 
 "We have seen this e-mail reportedly sent by a representative of the PR firm Burson-Marsteller," says Chris Gaither, Google's senior manager of global communications and public affairs, who assumes the e-mail exchange in fact took place. "We're not going to comment further. Our focus is on delighting people with great products," he said. 
 
 Social Circle's intent 
 
 Gaither points out that Google's Social Search, of which Social Circle is now part of, was launched in October 2009 as a tool to help remind Gmail users of the people they regularly e-mail or chat with, so-called direct connections. 
 
 The service also privately sends each Gmail user the names of "secondary connections," a listing of the people each direct connection happens to be following publicly on the Web. 
 
 Google prompts Gmail users to voluntarily connect any accounts they have on Facebook, Yahoo, Flickr, LinkedIn, Quora, Twitter or Yelp to their Google profile. 
 
 Google then mines those connected accounts for individuals who become secondary connections. 
 
 "Social connections are based on publicly available information and private connections you have on Google products and services," explains Gaither. 
 
 USA TODAY asked 26 avid Gmail users about Social Circle and found only two were vaguely aware of the service, while 14 said they would disable the service, if they could, citing privacy concerns. 
 
 Gaither attributes low awareness to the fact that Google purposely designs new features "to blend seamlessly … because that's what our users prefer." 
 
 That explanation works for Elizabeth Holst, 26, a grad student in Chicago, who acknowledges how difficult it has become to remain anonymous online. 
 
 "Why fight it?" Holst says. "And there is value in hearing about things from your friends." 
 
 By contrast, Jason Gerdon, 29, a public relations professional in Costa Mesa, Calif., says he'd like to opt out of the service. 
 
 "I like having control over my connections," Gerdon says. "Although this might be similar to Facebook or Twitter recommendations, this just feels more intrusive." 
 
 Dion Moses, 25, a computer engineer in Ridgecrest, Calif., also wants out of Social Circle. "This is shocking," Moses says. "I had no idea that Google was doing this, and I pay close attention to most technology news sites." 
 
 The only way to disable Social Circle, Gaither says, is to stop using Gmail. 
 
 Chasing Facebook 
 
 Google's push to proactively expand Gmail users' connections, in fact, derives from Facebook's stunning success at enticing its 500 million-plus users to voluntarily reveal their closest acquaintances, along with rich information about their preferences and online behaviors, says Kevin Lee, CEO of search consultancy Didit. 
 
 Google, by comparison, can really only profile Internet users based on their search queries and who they e-mail and chat with, Lee says. 
 
 The search giant generated $29.3 billion in revenue in 2010, mainly by selling sponsored ads to appear alongside specific search query results. 
 
 Facebook, a private company, is believed to generate about $2 billion in annual revenue by selling ads targeted to specific groups of friends, such as expectant mothers, recent retirees or frequent fliers, Lee says. 
 
 Social-networking sites — Facebook, in particular — are not without privacy problems. They face heightened scrutiny over their evolving privacy policies from consumers, privacy advocates and legislators. 
 
 While most Facebook users "freely provide information about themselves, it's far less clear that they understand how that information is being used by Facebook or third parties to profile them," says Opus Research analyst Greg Sterling. 
 
 Even so, Google has set out to emulate Facebook by using tracking programs and algorithms to connect more members from the top social networks to Gmail users. 
 
 "Google wants access to the dollars that Facebook is getting," Lee says. "They're trying to create a product that comes closer to mirroring Facebook's ability to target specific groups of people for advertisers." 
 
 As Google extends connections between Gmail and the top social networks, it risks upsetting at least some Gmailers. 
 
 "Users have a very high expectation of privacy in their e-mails," says Kimberly Nguyen, consumer privacy counsel for EPIC. 
 
 Brent Jones. For publication consideration in the newspaper, send comments to For more information about reprints & permissions , visit our FAQ's. To report corrections and clarifications, contact Standards Editor. For publication consideration in the newspaper, send comments to letters@usatoday.com . Include name, phone number, city and state for verification. To view our corrections, go to corrections.usatoday.com
– One of the world's biggest PR firms pitched anti-Google stories to newspapers and bloggers in what appeared to be an attempt to smear the search giant. Who could have hired them: Apple? Microsoft? Turns out it was Facebook, as a spokesman for the company confirmed last night. The bizarre move escalates the war between the two companies, and makes Facebook—which previously seemed "so invincible"—look "clumsy" and "a little bit afraid," writes Dan Lyons in the Daily Beast. Facebook's main beef with Google appears to be Google's use of Facebook data in its own new social networking operation. Facebook hired Burson-Marsteller, which has worked with both Bill and Hillary Clinton in its 58-year history, to do the dirty work. Two Burson flacks, former reporters both, pushed negative stories about Google's foray into social networking to multiple outlets, claiming Social Circle, a tool that lets Gmail users see info about their friends and their friends' friends, violated privacy. USA Today looked into the privacy claims, wasn't convinced, and accused the PR firm of spreading a "whisper campaign." Lyons thinks Facebook's "pious handwringing" about privacy might be a "smokescreen. What really seems to be angering Facebook is that some of the stuff that pops up under 'secondary connections' in Google’s Social Circle is content pulled from Facebook," he writes, concluding that the whole incident is simply "embarrassing" for Mark Zuckerberg & Co. Click for his full piece.