Microsoft's Secret Campaign Against Google Includes CEO's Ex-Girlfriend

Marcy Simon, the former mistress of Google CEO Eric Schmidt, has landed a PR gig at Mark Penn's Burson-Marsteller. We hear her new job is stirring up antitrust trouble for Google at Microsoft's behest.

A tipster tells us that Simon is "running the somewhat secret Penn campaign for Microsoft trying to throw dust into Google's gears (like trumped-up antitrust issues, for instance, not to mention privacy complaints." Our source adds that the campaign "is heavily under wraps," with employees forbidden to discuss it, and goes under a cover name (possibly "iCom").

It's good timing for Penn to rev up the business. Barack Obama's incoming antitrust cop, Christine Varney, seems friendly to the notion that Google's dominance of Internet advertising could pose antitrust issues.

Which leaves Simon's pick as point person as the only curiosity about the campaign. Reached by phone at Burson Marsteller, Simon did not elaborate on why she joined the firm or left her recent gig at Thomson Reuters, but promised to call back. She hasn't done so yet. Update: But her boss, Josh Gottheimer, a former speechwriter for Bill Clinton, gave us a ring to deny "categorically" that Simon will have any involvement in any anti-Google efforts. He also says, "We are not lobbying for Microsoft against Google."

As it happens, Microsoft and Burson-Marsteller are the sole names of any note in a largely European initiative called Icomp (likely the "iCom" our tipster referred to) to promote "vigorous competition" in the "online marketplace" — which seems like a thinly veiled effort to lobby against Google's domination of Internet advertising.

Penn, the incompetent PR guy whose bad advice was widely credited with losing the presidency for Hillary Clinton, has taken on Microsoft chairman Bill Gates as a client before. But Simon rivals him in her access to the customer: It's widely believed that she and Gates carried on an affair when she last worked for Microsoft.

More recently, she took up with Google's Schmidt, picked up an engagement ring, and by the fall of 2007 had gotten a a job working on the launch of the Googlephone. That arrangement didn't last long, and soon afterwards, Schmidt and Simon split, with Schmidt (who's married) taking up with a new woman.

Simon has an acquaintance who also recently parted ways with Google: incoming AOL CEO Tim Armstrong. Armstrong is an investor in an online-publishing startup called Associated Content, which recently hired ex-Google Patrick Keane as its CEO, and we hear Simon might be taking him on as a client. She Twittered about his hire and emailed a press release listing her personal cell phone number and Hotmail address as a media contact.

Jennifer Graham, Burson's current head of tech PR, is said to be furious about the hire; Simon might replace her as head of Burson's global tech practice, according to one theory floating around. Gottheimer adds that Simon will be working for him on new business development and won't be involved in the technology practice. Which seems like a waste of her unique talents (and doesn't explain Simon's repping of Associated Content).

Given that, the antitrust assignment looks odd: Simon is not known for her political resume. She would seem to bring two unique qualifications to the job: Knowledge of the enemy, and a burning passsion for revenge. Hell hath no fury like a woman scorned.