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Google to Take On Facebook With New Social Features

Sept. 14 (Bloomberg) -- Google Inc., stepping up competition with Facebook Inc., will add a layer of social-networking features to its main products, Chief Executive Officer Eric Schmidt said.

The changes will come in the fall of this year, Schmidt said today at a press briefing in Arizona. He declined to elaborate. The remarks followed comments by a Facebook executive that Google was building a new social-networking site.

The company is playing catch-up with Facebook, the top social-networking service, which passed Google as the most-visited U.S. website earlier this year. Weekly traffic at Facebook exceeded Google’s for the first time in March, according to Experian Hitwise. Google’s current social services, including its Buzz and Orkut features, haven’t been able to match Facebook’s growth.

“Facebook is the leader in the emerging social Web,” said Ray Valdes, an analyst at Stamford, Connecticut-based Gartner Inc. “Google is Facebook’s most direct competitor, because Google is dominant in the previous generation of the Web, the content-centric Web.”

Google is expected to start “a fairly significant social-media platform,” Stephen Dolan, commercial director for Asia at Facebook, said at a conference in Hong Kong earlier today. Personal communication is increasingly being conducted via social websites, he said.

Place to Converse

“Conversations that are intimate have really moved to a social-networking forum, and commercial conversations kind of sit outside of that,” said Dolan, speaking at the Asia Media Summit conference.

Google has increased its pace of acquisitions this year, partly to shore up social features. The company, based in Mountain View, California, has made more than 20 purchases in 2010, compared with about five deals last year, according to Bloomberg data.

Google fell $1.84 to $480.43 today in Nasdaq Stock Market trading. The shares have declined 23 percent this year.

To contact the reporters on this story: Brian Womack in San Francisco at bwomack1@bloomberg.net; Mark Lee in Hong Kong at wlee37@bloomberg.net

To contact the editors responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net; Tom Giles at tgiles5@bloomberg.net

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