Facebook-Google 'Cold War' Suddenly Gets Hot

Facebook's surreptitious public relations campaign against Google shows how intense the competition has become between the two companies -- and what lengths Facebook will go to in the fight.

"There's always been a cold war with skirmishes on varying fronts since Facebook came on the scene so big," said Dan Olds, an analyst with The Gabriel Consulting Group. "They increasingly see themselves as rivals with Google for advertising dollars. This shouldn't be a surprise to anybody. The competition? It'll probably go even farther. We'll see more hard-nosed competition coming."

Facebook admitted this week to hiring a well-known PR firm to plant anti-Google stories in the media.

Both Facebook and the PR firm, Burson-Marsteller, admitted Thursday to trying to get journalists and bloggers to write negative articles about Google's privacy practices. While Facebook denied that it was pushing a "smear campaign," industry analysts said the surreptitious back-stabbing is a clear indication of how heated it's become between the two Internet behemoths.

"Facebook is recognizing that Google is its biggest threat," said Rob Enderle, an analyst with the Enderle Group. "Google is clearly gearing up for a run at social networking.... If anybody could put Facebook out of business at this point, it would be Google.

"A head-to-head competition between the two companies would probably end up with Google winning and Facebook gone," he said.

The competition, and apparently ill will, between Facebook and Google has grown in recent months.

Last fall, Microsoft tightened its ties with Facebook , with the two companies working to make Internet search more social. It was a move that represented the biggest threat to Google's search standing yet.

After that partnership was announced, Ray Valdes, an analyst at Gartner, told Computerworld that there was a growing strategic conflict between Facebook and Google.

"There is a battle for the future of the Web, and it is not about search engines, but about the social Web," said Valdes at the time. "The competition is between the new and the old -- between Facebook as the early leader in the social Web, and Google as the dominant player in the content Web. Everyone else, such as Microsoft, Yahoo and Twitter, will play a secondary role, and will start lining up on one side or the other."

Given that level of rivalry, Enderle said he's not surprised that Facebook would use a PR company to target such a big foe.

"They realized they needed to do battle," he added. "They just misused their weapon.... Either stop doing this kind of thing or do it well."

Both Hadley Reynolds, an analyst with IDC, and Olds said one problem here is that Facebook executives are simply too immature and too inexperienced in business to handle this level of competition. It'll take a lot of business savvy to take down that kind of rival. And Facebook's misstep raises questions about whether co-founder Mark Zuckerberg and associates have that kind of savvy.

"To me, Facebook is too immature to be in the position it's in," said Reynolds. "It's growing too fast. It's in a spot where it's vulnerable to make stupid mistakes like this. In the past, it's made stupid mistakes exposing people's information and creating security leaks. This is less an issue of technology and more about management bringing mature judgment to growing a responsible business."

And Facebook's own privacy mistakes add another level to this whole issue.

What Facebook got caught doing was trying to seed stories in the media about Google's privacy practices. This comes from a social networking company that has had more than its share of privacy and security blunders .

"For one thing, this seems to be to deflect attention from the terrible track record Facebook has in protecting user information," said Reynolds. "This is classic the pot going down shouting that the kettle is black."

Both Reynolds and Olds noted that if Facebook wants to take its competitor down a few pegs, it needs to be careful about what flaws it's calling out.

"Facebook needs to realize they're not a teeny tiny company," said Olds. "They're too big a company to be able to get away with this kind of thing. They could have made these same points through regular communications without this skullduggery and they wouldn't have ended up in this spot. "

Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at @sgaudin or subscribe to Sharon's RSS feed . Her e-mail address is sgaudin@computerworld.com .

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