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Facebook red-faced after PR attack on Google

Google near US settlement over ad practices: WSJ
Washington (AFP) May 12, 2011 - Google is close to reaching a settlement with the Justice Department over allegations it made hundreds of millions of dollars by accepting advertisements from online pharmacies that break US law, The Wall Street Journal reported on Thursday.

The Internet giant disclosed earlier this week that it had set aside $500 million in anticipation of the results of a US government investigation into "the use of Google advertising by certain advertisers."

Google did not provide further details in the filing with the US Securities and Exchange Commission (SEC).

But the Journal, citing "people familiar with the matter," said it concerned an investigation into whether Google had knowingly accepted ads from online pharmacies based in Canada and elsewhere that violated US law.

"It's unclear whether those online drugstores were alleged to have sold counterfeit or expired drugs, whether they didn't require a valid doctor's prescription, or both," the newspaper said.

The Journal said a $500 million payment "would rank high among the criminal or civil penalties paid by companies in disputes with the US government."

In 2007, Google, Microsoft and Yahoo! agreed to pay a combined $31.5 million fine to settle allegations they had accepted ads from illegal gambling sites, the newspaper said.

by Staff Writers
Washington (AFP) May 12, 2011
Facebook was left red-faced on Thursday after acknowledging it had hired a prominent public relations firm to draw attention to privacy practices at Internet rival Google.

The PR firm, Burson-Marsteller, said meanwhile that it had taken on an assignment for Facebook on the condition that it not reveal the name of its client and that it should not have done so.

Facebook's clumsy PR effort was first revealed by the website The Daily Beast, which said Burson-Marsteller had reached out to a number of US news outlets urging them to look into claims Google was invading privacy.

The campaign, which targeted a Google tool called "Social Circle," was uncovered after a blogger turned down the offer from Burson-Marsteller and instead publicly posted emails from an exchange with the firm.

"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," one of the Burson-Marsteller emails said.

Facebook, which has struggled with privacy controversies of its own, said in a statement to AFP that it had hired Burson-Marsteller but insisted that "no 'smear' campaign was authorized or intended."

"Instead, we wanted third parties to verify that people did not approve of the collection and use of information from their accounts on Facebook and other services for inclusion in Google Social Circles -- just as Facebook did not approve of use or collection for this purpose," Facebook said.

Social Circle lets users of Google's Gmail see information about their friends and friends of their friends and the inclusion of data allegedly scraped from Facebook upset the Palo Alto, California-based social network.

Facebook said it hired Burson-Marsteller to "focus attention on this issue, using publicly available information that could be independently verified by any media organization or analyst."

Facebook was unapologetic but said "the issues are serious and we should have presented them in a serious and transparent way."

Burson-Marsteller, whose chief executive, Mark Penn, was chief strategist of Hillary Clinton's unsuccessful 2008 presidential campaign, confirmed it had been hired by Facebook.

"The client requested that its name be withheld on the grounds that it was merely asking to bring publicly available information to light and such information could then be independently and easily replicated by any media," the PR company said.

"Any information brought to media attention raised fair questions, was in the public domain, and was in any event for the media to verify through independent sources," Burson-Marsteller said.

"Whatever the rationale, this was not at all standard operating procedure and is against our policies, and the assignment on those terms should have been declined," it said.

"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."

Facebook is the world's largest social network with more than 500 million members while Google dominates the Internet search market.

The two Web giants are waging a fierce battle over online advertising and how people navigate the Internet.

Google, whose own social networking efforts have largely been failures, does not send Web surfers to Facebook, for example, and vice versa.

The Mountain View, California-based is currently winning the fight for advertising dollars.

Google's share of overall US online advertising revenue is estimated to grow to 43.5 percent this year from 38.9 percent last year, according to eMarketer, while Facebook's share rises to 7.7 percent from 4.7 percent.



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San Francisco (AFP) May 12, 2011
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