Both companies seem to be drawing the battle front on technology and features. This draws the conclusion that better technology makes a better social networking experience. But I don't think technology is the real battle front. The keyword is social not technology.
Its Where My Friends Are
No amount of technology can overcome the one great challenge that Google faces and Facebook already owns. Its where my friends are. Sure, Facebook doesn't own me or my friends, but its where they all are. I suppose if all my friends were on MySpace, I probably would be there too. And technology alone just can't overcome this social inertia that Facebook has (ie 500,000,000 people and growing).
Newton's second law of motion:
"by which every body, as much as in it lies, endeavors to preserve in its present state"
It won't work to get a few early adopters to move and hope the rest will eventually follow. No one wants to be on a social network all by themselves. For me to move, you would have to get all of my friends to move. And all of their friends. And all of their friend's friends. And so on to the tune of 500 Million because we are all connected. And do it all at once. Basically you need a digital Moses to lead a mass exodus to the social promised land.
But it happened with MySpace. No, not really. MySpace was big, but it didn't have the social inertia that Facebook does. It never reached the critical mass that Facebook has.
If Google wants to win, they need to figure out the social aspect of it and not worry so much about the technology aspect. Otherwise they will just end up with another Google Buzz.