Before Facebook there was Orkut which actually became the most important social network in Brazil, India and Estonia. Unfortunately, Google did not believe in this product, so it did not invest any resources on it. Not even to increase server capacity, which explains why the user experience was so frustrating that pushed many people to other networks.

One of them was Facebook, which quickly became the main social site. To a point where Google started to see a real risk and prepared its own social strategy, which includes Google Buzz and, in the future, Google Me. Orkut, its old product, which could have been what Facebook is today, is even losing its first place in India.

So what happened?
– Google is good at engineering but is not so good at social stuff. It just does not really believe on this type of sites.
– Orkut was quite successful but as Google did not buy new servers, it run too slow. So people moved to other networks, but in India and Brazil, where bandwidth was really short and users did not notice Orkut’s speed.
– A Facebook with Google’s user conscious culture would be hard to monetize. Google wants Facebook’s content on its search results but users still want their privacy. Both things are not so easy to mix.
– Facebook’s future prospects are related to social games, as it is getting 30% of developers’ earnings from virtual good purchases. Google had never expected this to happen, which explains why it also wants a bit of this huge (and new) market. Google already has an online payment mechanism called Checkout that it could use.
– Facebook is working on a brand new search engine which could really threaten Google’s monopole on this area.