You got to hand it to Microsoft: This week, the Redmond, Calif., giant seemed to pull Facebook

 right out from under Google’s feet.

But Google (nasdaq: GOOG - news - people ) may have passed on the deal for a very good reason: The company may already have all the pieces it needs to patch together a homegrown social networking site–one that could even trump Facebook.

“They don’t need Facebook, otherwise they would have bought it.” Georges Yared, head of Yared Investment Research said. “Google can sit there, smile and say, ‘Look at what we did, we made Microsoft (nasdaq: MSFT - news - people ) pay $240 million for a tiny stake.’” Meanwhile, Google has a lot “sitting in its back pocket,” Yared said.

Google’s first homespun networking site, Orkut, which debuted in 2004, has gained traction in Brazil and India. Although it has stirred up some controversy–because people have used the network to form racial and religious hate groups–it is becoming increasingly popular in emerging markets, such as Asia.

According to the TechCrunch blog, Google is planning to revamp the website in November by opening the programming code to developers, who can then design a host of new applications for the network. It’s a play straight from Facebook, which now offers users hundreds of different applications–but Google could go a bit further.

On Facebook, developers are required to work within the site to participate. Google may open the doors wider, by allowing developers to not only operate applications in the site, but also push data outside, into non-Google applications.

Don’t stop with Orkut, though. There’s Google’s video networking site YouTube, of course, and Google’s cozy relationship with red-hot Apple (nasdaq: AAPL - news - people ). Google also offers email and a chat service.

And there’s iGoogle, launched in 2005: a customizable “homepage” that lets users add applications such as a weather update service, news feeds, stock updates and more light-hearted applications like “funny cat photos.”

By adding new applications, and stitching together iGoogle and its communication programs, Google could have an unusual–and powerful–social networking presence. “The biggest dark horse is iGoogle,” Nollenberger analyst Todd Greenwald said.

On Facebook, a user can get updates on friends’ profiles and actions; iGoogle could be manipulated to do the same. “All the things that have made Facebook so popular can be done on iGoogle as well,” Greenwald contends.

Now toss in YouTube into the mix. “There are so many possibilities with YouTube,” Yared of Yared Investment Research says of the video-sharing site, which Google acquired for $1.7 billion in 2006. Like Facebook, YouTube is an online community that aggregates data from users. Although Google has been laissez-faire with YouTube thus far, letting it maintain its status quo feel and design, the site may be due for a shake-up.

Finally, if Google does pull together a social networking system, analysts expect to see the company showcase its close relationship with Apple. Linked by a mutual distrust of Microsoft and by the fact that Google CEO Eric Schmidt sits on Apple’s board, the two companies have been getting closer recently. The new Apple Leopard operating system, making its debut Friday, features built-in Google applications that will work seamlessly with the system.

Analysts aren’t expecting to see a social network emerge this year. Luckily for Google, just about every company is still scrambling to make sense of social networking. As the thousand-pound gorilla in the Internet kingdom, Google has the luxury of time. “Google will walk before they run,” Yared said.

Tags: social networking internet social network facebook zoop

This entry was posted on Saturday, October 27th, 2007 at 2:01 am and is filed under Business, Internet. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.