Fallout from Facebook's Google Smear Scandal

Facebook has admitted to hiring a top PR agency to plant anti-Google stories in the U.S. media.

The move will further damage relations between the two tech giants, which are increasingly fighting for dominance of the online advertising space.

Representatives of Burson-Marsteller tried to solicit an independent blogger and USA Today, The Washington Post, Politico.com and The Huffington Post to attack Google's privacy policies and practices, particularly around social search and Google's Social Circles offering.

Both Google and Facebook have been criticized recently over their privacy polices, while Facebook has poached more than 200 Google staff in recent years.

When Burson-Marsteller learned that the bloggers approached to write the smear pieces had gone public, it issued a statement saying it had withdrawn from the contract.

Burson-Marsteller told the Financial Times: "Whatever the rationale, this was not standard operating practice and is against our polices and the assignment on these terms should have been declined."

Facebook said there was no intent to smear Google. "The issues are serious and we should have presented them in a transparent way," a company representative said.

"When companies get big enough and grow really quickly ... you start to get these rather bizarre political marketing ploys," said Hadley Reynolds, an analyst with IDC. "It certainly isn't serving Facebook or the industry or Burson-Marsteller well, in this case. The power of social media exposes these shenanigans."

Burson-Marsteller clients include Accenture, Microsoft, HP and SAP but thecompany does not spurn controversial accounts.

It specializes in crisis management and worked with the Nigerian government to polish its image against human rights abuse allegations, the Argentinean junta in the 1980s, and with pharmaceuticals company Johnson & Johnson after eight people died taking painkillers contaminated with cyanide.

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