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Facebook has admitted that it secretly hired a public relations group in the U.S. with the aim of generating stories critical of Google Inc.'s approach to privacy.

The disclosure is the latest sign of the increasing rivalry between Facebook and Google, as they go head-to-head over internet users' time and advertisers' budgets.

Burson-Marsteller, a WPP-owned PR agency whose clients also include Microsoft, contacted national newspaper reporters and opinion-piece writers with a view to securing coverage on Google's alleged use of personal information from Facebook and other social networks, but did not inform the journalists that they were acting on behalf of Facebook.

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Details of an e-mail exchange between Burson-Marsteller and one individual were posted online before a reporter at the Daily Beast news website exposed Facebook as the agency's client.

All parties have since admitted to the assignment.

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. 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."

This week, analyst group Enders published a report forecasting that revenues from Facebook's display advertising business would overtake sales from the same unit at Google - including YouTube and banners but excluding search and simple text ads - this year.

Both Facebook and Google have come under fire from privacy campaigners and some users for the way they handle personal information. This week, Google said it was considering pulling its controversial Street View service from Switzerland amid legal wrangles over privacy. Last year, Facebook faced criticism from groups including the European Commission's data protection officials when it made its default privacy settings more open.

Rosanna Fisk, chief executive of the Public Relations Society of America, said Facebook and its agency's activity was "unethical and improper."

Facebook denied that it intended to run a "smear" campaign over Social Circles, a little-known Google feature that charts connections between Internet users based on their profiles on sites such as Facebook, Twitter and LinkedIn.

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"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. "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. The issues are serious and we should have presented them in a serious and transparent way."

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