Sudden Disconnect Over Social Networking Deal

Despite Friendly Overtures, Competing Interests Threaten Venture Between Google and Facebook

Google's announcement of a service to "make the Web more social" was decidedly casual, or staged to seem that way.

Standing beside a campfire, lawn chairs and toasted marshmallows, engineering director David Glazer explained how, through an agreement with Facebook and similar sites, Google's effort would serve a primal human need.

"We all like huddling around fires, and huddling around food and talking to each other -- people are social," Glazer, dressed in a red-checked shirt and sneakers, told about 100 attendees gathered outside the company's headquarters last month. "With 'Friend Connect' we are trying to make that happen everywhere on the Web."

Yet within three days of the campfire, a dispute erupted between Google and Facebook, its largest partner in the new service, that reflected the fact that for Web companies there is nothing casual about the business of Internet socializing: There's too much money, maybe billions, at stake.

Facebook, the burgeoning social network, abruptly withdrew its support for Google's Friend Connect, meaning that none of Facebook's tens of millions of members could sign in to Web sites using Google's new service.

Coming so soon after the highly publicized launch, it was an embarrassing rift for both sides. Many view the ongoing standoff as a contest with far-reaching implications for Web socializing.

In the common social networks, people communicate, organize and socialize largely within sites -- such as Facebook, MySpace or LinkedIn -- but not outside of them. This model, referred to in geek parlance as the "walled garden," ensures that social networking sites get immense traffic and screen time from members, and the revenue that comes with that.

Many in the industry are proposing a different model, however, in which every Web site will have a social aspect. In this scenario, there will be no need for a person to confine socializing to MySpace or Facebook. People could tap into their information -- contacts and pictures -- as they roam the Web. The social networking sites would function more like a utility, storing a person's contacts, photographs and other tidbits.

"Social networking sites are at a major fork in the road," said Bernard Lunn, a tech and media entrepreneur who writes for ReadWriteWeb, a blog that focuses on tech issues.

Although it's uncertain what shape social networks will take, there is little doubt that they have become wildly popular and that their value has been the subject of high-stakes financial speculation.

In 2005, Rupert Murdoch's News Corp. bought the company that owned MySpace for $580 million. Last year, Microsoft bought a 1.6 percent stake in Facebook for $240 million, a purchase that valued the three-and-half-year-old company at $15 billion.

But while there are millions willing to spend time updating their pictures and profile information on social network sites, there may be just as many wondering: What good are they?