There is some belief at Google that their DNA is not perfectly suited to build social products, and it's a quite controversial topic internally. The part of social that's about stalking people, sharing photos, looking cool — it's mentally foreign to engineers. All those little details are subtle and sometimes missed, especially by technical people who are brought up in a very utilitarian company.
Now that social networks have become very popular, Google realized there's a lot of value in sharing information with your friends. Search results can include web pages recommended by your friends, ads can be better targeted based on your social profile and web apps like Google Latitude or Google Buzz can be more useful.
Eric Schmidt said that Google will add a social layer to its existent services and it won't create a social network like Facebook. Google also acquired start-ups that created apps for social networks (Slide, Jambool). "In a rare move for an outsider, Google has named Max Levchin, former CEO of Slide and cofounder of PayPal, a vice president of engineering," reported VentureBeat two months ago.
Google will have to learn to create social services, but it won't be easy and Google's culture might have to change. Here's what Max Levchin said a few months before becoming Google VP:
For some strange reason, in the last few years, the industry, or the press that covers the industry, has come to glorify failure. I think it's completely wrong. Failure is not good.
For Google, failure is always an option, especially when it comes to social networking.