Facebook execs must be red-faced with embarrassment.

The social-networking giant Facebook has been caught red-handed in a secret smear campaign against industry rival Google, FoxNews.com has confirmed.

According to a report from The Daily Beast Wednesday night, Facebook hired leading public-relations firm Burson-Marsteller to “pitch anti-Google stories to newspapers, urging them to investigate claims that Google was invading people’s privacy.”

When questioned early Thursday morning about these stunning allegations, Burson-Marsteller quickly backpedaled emphasizing that these kinds of campaigns go against its corporate code.

"Now that Facebook has come forward, we can confirm that we undertook an assignment for that client," Burson-Marsteller spokesman Paul Cordasco told FoxNews.com. "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."

Facebook claims it did not authorize or intend to run a "smear" campaign, the Wall Street Journal reports.

"We engaged Burson-Marsteller to focus attention on this issue, using publicly available information that could be independently verified by an media organization or analyst," a Facebook spokesman said. "The issues are serious and we should have presented them in a serious and transparent way."

The plan backfired when Burson offered to ghostwrite for influential security blogger Christopher Soghoian, promising to draft an anti-Google op-ed criticizing a new tool called Social Circle. The PR firm promised that the piece would eventually appear on popular online websites such as The Washington Post, Politico and The Huffington Post.

Soghoian said Burson was “making a mountain out of a molehill” over the new service, however, rebuffing the firm's clumsy advances and instead posting the e-mail exchange online.

Burson-Marsteller did not immediately respond to FoxNews.com requests for comment either.

USA Today described the scandal as an undercover “whisper campaign” against the search giant, one leaving Silicon Valley insiders wondering who was playing dirty. Initial fingers pointed at perennial competitors and long-time industry behemoths Microsoft and Apple. Turns out it was the new kid on block instead -- Facebook.

When the Daily Beast confronted Facebook with the evidence of the smear campaign, a company spokesperson confirmed that Facebook had hired Burson, “first because it believes Google is doing some things in social networking that raise privacy concerns; second and perhaps more important, because Facebook resents Google’s attempt to use Facebook data in its own social-networking service.”

Dan Lyons, who authored the article for the Beast, called it all part of a growing rivalry, and a bitter one at that. “Google, the search giant, views Facebook as a threat, and has determined to fight back by launching a social-networking system of its own,” Lyons wrote.

“So far, however, Google has not had much luck, but Facebook nonetheless felt it necessary to return fire -- clandestinely,” he noted.

For Facebook, this represents the latest in a history of gaffes for a company that has struggled to portray itself as trustworthy, noteworthy as founder Mark Zuckerberg and company struggle to deal with the evolving complexity of personal privacy.

Google has clearly hit a nerve as it looks to push into social networking -- the company is expected to unveil an advancement to its social networking functions soon, according to various reports online -- and with Larry Page steering the ship, many critics expect a more creative and perhaps aggressive approach compared with the all-business leadership of former CEO Eric Schmidt.

In the end, these companies are fighting for the future of the Internet -- and the war is just beginning.