• by Thom Forbes  @tforbes, May 13, 2011

The home-page tease on the San Jose Mercury News website this morning calls it a "potboiler that has put much of Silicon Valley on the edge of its seat," and Patrick May's lede entices us further with the promise of "an unfolding tale ... of skullduggery." Indeed, the story has had classic whodunit qualities since some bloggers and newspaper journalists let it be known that they smelled a rat when the Burson-Marsteller public relations firm refused to divulge who was paying it to pitch a story about Google's purported violations of Facebook users' privacy. Suffice it to say that they suspected it was not a disinterested party.

It was not. It was Facebook itself, it admitted yesterday after prods and probes from around the blogosphere.

The story has been unfolding for 10 days. On May 3, privacy blogger Christopher Soghoian posted a string of emails between Burson-Marsteller vp John Mercurio and him in which the PR guy writes that he wants to "gauge your interest in authoring an op-ed this week for a top-tier media outlet on an important issue that I know you're following closely ... Google's sweeping violations of user privacy."

When Soghoian asked who was paying Burson-Marsteller, Mercurio responded that he could not divulge his client "yet," but that everything in his provocative email was publically available information.

In USA Today this morning, Byron Acohido, Scott Martin and Jon Swartz call Facebook's admission that it was behind the campaign "a stunning mea culpa." At the same time, Facebook claimed that it "never intended to smear the search giant."

"Oh, really?" you may be joining me in asking. "Exactly, then, what were your intentions?" Facebook issued the following explanation: "We engaged Burson-Marsteller to focus attention on this issue, using publicly available information that could be independently verified by any media organization or analyst," a statement said. "The issues are serious, and we should have presented them in a serious and transparent way."

"The truth: Both sides look like idiots," reads the subhead above Dan Lyons' piece in the Daily Beast. USA Today credits Lyons with doing the gumshoe work that revealed Facebook as the wizard behind the curtain. It also provides a concise chronology of the saga (after a hearty pat to its own back):

"The admissions follow a Tuesday story in USA Today detailing how Burson consultants approached top-tier media companies and high-profile technologists, on behalf of an unnamed client, to seed largely unfounded allegations about privacy shortcomings in Google's Social Circle service."

"It's on like Donkey Kong between Facebook and Google, seeking victory by any means," Santa Clara University law professor Eric Goldman tells the Mercury-News' May. "But I'm a little perplexed about why Facebook decided to try and stir the pot through a PR agency. If they wanted to call out Google, then call them out publicly."

Other PR experts basically tell both May and Lyons that whisper campaigns are a normal part of everyday, ho-hum business but that Burson-Marsteller screwed up the execution by not knowing the whisperees well enough. It didn't help that the two Burson executives involved are recent hires and reformed journalists who have not yet mastered the wink-and-nod techniques that keep you (and your client) out of trouble.

But the PR firm maintains what happened is not SOP at all "and is against our policies, and the assignment on those terms should have been declined. When talking to the media, we need to adhere to strict standards of transparency about clients, and this incident underscores the absolute importance of that principle."

Lyons says that the fact that Burson is publicly blaming Facebook is particularly surprising to industry observers and "not a very good strategy to keep or solicit other clients." It also keeps the story in the headlines. Others say that what it did was flat-out unethical.

"It's simple," Public Relations Society of America CEO Rosanna Fiske tells Miguel Helft and Claire Cain Miller in the New York Times' "Bits" blog. "They took the road of misleading and not disclosing who they were representing. In the essence of the public relations code of ethics 101, that's a no-no."

Privacy is a looming issue for both Facebook and Google, of course, and the Wall Street Journal reports that the latter is faring much better in the public's eye. When Ponemon Institute surveyed Internet users in March, Google was No. 19 among the companies most trusted for privacy but Facebook didn't make the top 20, Geoffrey A. Fowler and Amir Efrati report. "Google continues to be viewed as an organization -- even if it is a monster in terms of data collection -- that is somehow meeting best privacy practices," the privacy firm's founder, Larry Ponemon, tells them.

Google has steadfastly refused to comment on the current fracas but a spokesman told USA Today "with typical Google whimsy": "Our focus is on delighting people with great products."

If that's what's passing for whimsy these days, I suggest we all take a weekend, shall we?