I am no web expert, but now it looks really obvious :
If you have the web site traffic, you are literally the superman. Content can gradually evolve.
Bring in the people :Then applications can evolve
"If people do search within Facebook, if they do email within Facebook, if they do instant messaging within Facebook, all of these will chip away at Google's properties."
Google bars Facebook from accessing contacts and other data. Good move, from a rivalry point of view. But Social Network comes with an expiry tag unless you try to bring in some really useful applications apart from sharing photos, videos.
Social Networking websites are a necessary evil. Anyway let us see what happens. Seriously, people can invest time on something more valuable - I know it sounds cliched , but that truly is the case.