Does Facebook’s Privacy Flub Matter?

Last Wednesday Los Angeles film production assistant Jaime Davila, 25, logged on to Facebook to discover more than a hundred new messages, none of which were for him. As the result of an embarrassing code glitch, the social networking website briefly misrouted messages to a small number of users. All of those messages were personal, and some were even salacious.

As word got out, Facebook’s critics immediately raised privacy concerns. In the wake of Google (GOOG) Buzz, the new social service that Google launched inside of Gmail last week, social web services are being brought to task for compromising their users’ personal information. In the case of Buzz, many Gmail users felt blindsided by the service, which immediately revealed who they were corresponding with most frequently. (See “Google’s Poor Social Score“)

By contrast, Facebook’s code glitch hardly compares; it was an accident that impacted a small sliver of the company’s 400 million users. If anything, this event shows how much better Facebook does than its peers in addressing privacy concerns—all without compromising founder Mark Zuckerberg’s vision for the future of communications. It’s a delicate balance. When companies get it wrong, as Google did, users complain and often leave. In this instance, Facebook responded quickly, explaining exactly what happened and how the company remedied the problem.

More broadly, privacy will continue to be one of Facebook’s most critical issues as it grows, and Zuckerberg knows this. Over the years, he has had a couple of embarrassing missteps when he has misunderstood how users might react to a product or a feature. The most glaring example of this is Beacon, a product launched at an advertising event in the fall of 2007. Beacon allowed people to share information with Facebook friends based on their web activity on other sites. After both privacy groups and individual users staged loud protests, Zuckerberg wrote an apology on his site, removing Beacon. He later relaunched it in a slightly different form.

Zuckerberg learned a good deal about how to listen to his users from this experience and others like it. As a result, the company is constantly improving its privacy settings, and last December it overhauled these settings entirely in an attempt to make it easier for users to control content on their profiles. Also, Zuckerberg communicates about upcoming changes to the site well in advance of their launch and asks users for their opinions. And when something goes wrong on the site, he addresses it with users immediately.

Because he has earned their trust, Zuckerberg is able to introduce radical changes to Facebook even when users express negative sentiment. He makes his decisions based on data about how people use the site, and he does an increasingly better job at communicating to users about why every decision is made. Consider the recent redesign: love it or hate it, you knew it was coming long before it arrived.

And on the occasion that a glitch pops up, users are more willing to call it an accident. “I would be furious if my personal messages went out,” said Davila. But his Facebook usage has not slackened.

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