The social networking giant, Facebook found themselves caught up in a campaign-level fiasco today when news outlets caught them secretly hiring a PR firm to distribute negative press about Google. The plot revolved around producing FUD (Fear-Uncertainty-and-Doubt) directed at Google’s social application Social Circle by amplifying privacy fears about how it functions.

The caper’s collapse started when a blogger, Chris Soghoian, refused to post suggested articles critical of Google and instead went public with communications. USA Today caught wind of the story—having had several reporters contacted by the PR firm—and started their own investigation.

The Daily Beast today confirmed the clumsy smear of Google came from Facebook and offers a timeline and some history of how it was uncovered,

At issue in this latest skirmish is a Google tool called Social Circle, which lets people with Gmail accounts see information not only about their friends but also about the friends of their friends, which Google calls “secondary connections.” Burson, in its pitch to journalists, claimed Social Circle was “designed to scrape private data and build deeply personal dossiers on millions of users—in a direct and flagrant violation of [Google’s] agreement with the FTC.”

Also from Burson: “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.”

Chris Soghoian, a blogger Burson offered to help write an op-ed, says Burson was “making a mountain out of molehill,” and that Social Circle isn’t dangerous.

Possibly no more dangerous than a social network where you friend everyone and their neighbor’s cat who can then see everything you post about online… Pot, Kettle, have you met my good friend cast-iron skillet? Both Google and Facebook have been sailing the choppy waters of modern privacy and faced their own demons both in public fears and government scrutiny. However, without some sort of direct evidence of wrongdoing or distinct privacy issues I’d call a moratorium about calling anything a “flagrant violation.”

Google and Facebook are already fairly bitter rivals when it comes to addressing customers, data, and privacy. In fact, we’ve seen them get into slap fights before such as when Google sniped at Facebook over portability for locking their customer data into their network.

This FUD campaign brings the rivalry between the two competitors to a whole new level.

Facebook has shown a basic disrespect and disregard for the public by trying to usurp the journalistic institution in order to guide distrust where not only is none warranted for the claims made but actually makes it harder to uncover what really might be a problem. This sort of behavior is nothing short of irresponsible.

If Google’s Social Circle tool actually has internal problems when dealing with user privacy, as I said above, I’d rather see some distinct results so that we can address them. Indeed, issues that affect Google’s product could exist across other hypersocial media and it’s going to be the facts of the matter that will educate us, not ominous doom-saying whispered between bared digital teeth.

User privacy and security are a big deal even as our society is redefining what it is to be a private person. People who use the Internet increasingly live their daily lives largely in public, but the reallocation of mental energy is difficult for a generation who equate public with leaving the house. The younger generation more broadly accept that their friends see-hear-feel everything they do and connect themselves almost to a level of oversharing. The fact that our daily lives can be rebroadcast by our friends into these networks (without our knowledge or permission) even further compounds the highly connective nature of privacy and the cultural implications of social media.

Thanks to Chris Soghoian and USA Today we have a little more signal and a little less noise in the privacy debate.

Hand me the binoculars, I want to watch what’s happening in Mountain View, California.

Google snark-artillery preparing to fire on Facebook in 3…2…1…