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FACEBOOK-GOOGLE PRIVACY PR SMEAR IS A CAMPAIGN IN AN EPIC, ESCALATING WAR

Posted on May 17, 2011

So that was a bit embarrassing for Facebook. It appears the company was just caught red-handed trying to surreptitiously engineer a smear campaign about Google and alleged privacy violations.

But despite the amount of egg on Facebook's face this week, don't expect this to be the last time the social network tries to convince the world that the search giant is violating fundamental principles of correct behavior. Or vice versa.

A battle is brewing between the two companies, but it won't be a conventional fight between two businesses trying to protect market share. It won't even been an ideological battle. Rather, it will be an epic clash between two companies with overpowering senses of mission - and ones they will battle furiously to further and protect. After all, it's these missions that both companies surely see as the paths to unimaginable wealth.

But first, to recap the current imbroglio. Last week, staffers at PR mega-firm Burson-Marsteller, hired by an unknown client, pitched to several journalists a story about how Google's Social Circle service was purportedly endangering consumer privacy by supposedly scraping private data and building "dossiers" on millions of users. In one case, the firm even apparently offered to draft op-eds and help get them placed in top news outlets. (See emails between Burson staffer John Mercurio and blogger Christopher Soghoian, posted online by Soghoian.)

Now, The Daily Beast has revealed that the client behind the whisper campaign is none other than Facebook. According to Beast writer Daniel Lyon, the company claims it was motivated by privacy concerns in general, and concerns that Google was gathering its information from Facebook in particular.

The incident, however, reflects a larger phenomenon: The companies, which in principle have separate missions, are beginning to tread on each other's toes. And as a result, we are likely to see more such wrangling - in public and behind the scenes.

Facebook sees its mission as - to quote verbatim - giving "people the power to share and make the world more open and connected." Its entire product is based on enabling people to connect with the people and things that are important to them. At its core, Facebook is simply a giant database. But it's one with front-end tools that enable people to easily make the kinds of connections that previously simply weren't possible.

To support this mission, Facebook sells ads (for now - who knows what other ways they'll monetize all of this in coming years) - ads against the content that users surface about themselves. If a baby store in Salt Lake City wants to put ads in front of - and only in front of - women aged 25-35 living within 10 miles of the city, Facebook can do that for them, based on the information users enter about themselves.

Facebook makes a lot of money from offering this service. This year alone it is expected to reel in over $4 billion in advertising. And that money is what enables Facebook to keep building features that serve its mission.

Google says it has a completely different mission: To - and again, verbatim - "organize the world's information." Which they do largely by constructing complex algorithms that enable it to serve up extremely good results to any user's search query, but also by providing other information-related tools, like Google Maps, Google Street View, and Google Earth.

But to fulfill this mission, Google needs to have access to the world's information (simillar in a way to Facebook's need for you to not only share but share through Facebook). And to do that, information needs to flow freely. So much so that this has become a core philosophical tenet for the company. And Google feels so strongly about this that it has been willing to ruffle feathers by, on occasion, trying to make information flow more freely than some owners of said information would sometimes like it to. (For example, see the ever-ongoing Google Books lawsuit.)

In the meantime, however, Google, like Facebook, supports its mission by selling ads, primarily ads against search results (aka: information organized) and through its ad network which places ads on millions of other websites. And these revenues, in turn, enable the company to continue pursuing its mission to organize the world's information.

In theory, it would seem the two companies' philosophies would be able to live happily side by side. Over here, you have a company that, if you take them at face value, wants to help people connect to one another, and over there you have a company that wants to organize the world's information. What's to fight about? A lot, as it turns out.

Google fulfills its mission - and makes its nut - by sending bots out over the Internet, finding what information is out there, indexing it for easy retrieval when people run searches, and then running ads against those search results. With the rise of Facebook, however, an increasing amount of information sits behind a closed wall, one that Google's bots can't penetrate.

This, of course, drives Google crazy. It's a direct affront to its core philosophy - that information should be free, or, put a better way, free-flowing. So much so that last year, in response to Facebook's refusal to provide a way for users to extract their information from their accounts, Google blocked Facebook from enabling its users to import Gmail contacts.

"We have a data liberation engineering team dedicated to building import and export tools for users," Google said in a statement, noting that many other sites similarly permit import and export.

"Sites that do not, such as Facebook, leave users in a data dead end," the statement continued. Hence, the company said, "we will no longer allow websites to automate the import of users' Google Contacts É unless they allow similar export to other sites."

Facebook did not, and so Google's drawbridge went up.

This week's fiasco constitutes a similar skirmish, but in reverse. A little more than a year ago, Google introduced a feature called "Social Circle" available to users with Gmail accounts. When a Gmail user runs a search in Google, the results can include information culled from the Gmail user's primary contacts, but also from "secondary contacts," or friends of those primary contacts.

Facebook appears to have told The Daily Beast that the whisper campaign that has now blown up in its face was spurred by concern that Google was culling at least part of that secondary contact information from data on Facebook.

But what might have been a move to protect a competitive advantage - Facebook owns the preeminent social network and would prefer Google not build one to compete with it - was cloaked in a philosophical attack: Google was purportedly violating consumer privacy. (It's not clear at this point whether Google was, or is.) And similarly, last year, as Google tried to protect a competitive advantage of its own, it lobbed philosophical attacks. Facebook wasn't playing according to the principles of a free Internet, Google asserted, and so the network was penalized.

In the months and years ahead, we will likely see more and more such philosophical attacks lobbed to and fro. And in each case, there will be an element of truth to the attacks: Facebook doesn't always share with the rest of the Internet. True. Google gathers information which others sometimes claim it's not entitled to. True. But part of what will be motivating the behavior of each company - and their attacks - won't only be commonplace mudslinging between competitors. Rather, there will also be a fair dollop on each side of genuine indignation and outrage.

That's because neither Facebook nor Google is a run-of-the-mill company. Both are organizations genuinely consumed with a sense of higher purpose. Talk to people at Facebook, especially those who have been around from the beginning, and you will hear them speak fervently about their mission. It's not that, as a business, they're not interested in making money. (And certainly their investors are.) But that's not what they talk about. They speak with the conviction and enthusiasm of true believers about their vision and dreams of making the world a more connected place. (A more cynical person might argue that they've become so confident that this will result in boatloads of cash that they no longer have to consider the bottom line.)

It's the same at Google. Speak with some top executives about intellectual property rights and how the company's actions might be trampling those, and they turn the conversation to arguments about how making more information available makes the world a better place. It's not that they aren't aware of intellectual property rights; they simply give the impression that their focus remains always centered on their mission. Again, though, the mission is the money.

And as with Facebook, it's often seems as if it's not Google's drive to make money that makes them sometimes ride roughshod over others. Though, as with Facebook, it's not that they aren't interested in making money. It's simply that their commitment to their mission appears to remain their primary driving force.

All of which is what will make the coming battle most fascinating to watch. It won't be a conventional fight over market share or competitive advantage. At its core will be the fierce desire, by each company, to protect its mission and to battle anything and anyone that stands in the way of achieving its higher purpose.

So pull up a chair, and get the popcorn ready. Because what we're about to witness will be a true clash of the titans.

E-Commerce Alerts are issued by Bennett Gold LLP, Chartered Professional Accountants as situations develop. Bookmark this site and check back often. Our e-mail address is: info@BennettGold.ca

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