Google may have started out as an internet search company, but "as a business, Google generates the majority of its revenue by offering advertisers measurable, cost-effective and highly relevant advertising, so that the ads are useful to the people who see them as well as to the advertisers who run them."
This business is dependent on people using the internet. The more page views, the more money Google makes. As simple as that. However, Google have not sat back and let nature take it's course. They are constantly developing new apps to make the internet experience ever more compelling, and they are looking at ways to make the internet an indispensable part of everyday life.
When people complained the internet was too slow for some of the apps Google was developing, they introduced their own browser to speed things up. Foreign languages a problem? Google have invested heavily in translation tools.
So where does Buzz fit in? Well Facebook has grown into the king of social networking, with in excess of 400 million users. Facebook offers the complete intenet experience for many users; messaging, which is soon to grow into a full email service (if the rumours are to be believed), instant messaging, photo albums, real-time micro-blogging, and thousands of apps for games etc. Oh, and they also have the best system to stay in touch with your real-life friends available today. The problem for Google is that many of these people using Facebook aren't venturing out of it's "walled garden", and are thus avoiding the Google advertising that has infiltrated the rest of the internet. Google needs to be a player in the social networking game.
Of course, they do have Orkut, but that has not taken off in their home market, and the U.S. is where the real advertising dollars are. Google already have apps that compete very admirably against the individual aspects of Facebook, and then some, but currently they are very disjointed. And they had nothing in the real-time micro blogging arena at all.
What excites me is the potential of Buzz. Google will get the real time problem with Twitter sorted out, and will add links to other sides too. Imagine Buzz a few months down the line, when it has become the go-to site for all your social networking needs. You'll link with your friends, both real and virtual, from sites all over the web, in one place. Facebook may resist, and are probably big enough to do it, but I foresee smaller sites agreeing to Google's terms in the hope that it'll drive more people their way.
So what else does Google need to do? Well, a lot of people have complained about the integration with Gmail. I say integrate more! I think that Google should have one main page with Profile, Reader, Contacts and Calendar, all together with Gmail/Buzz. In fact, I don't know why Google hasn't done this - maybe it is a speed issue. I would hate Gmail to slow down to Windows Live speeds! However, I think Profile needs to become an integral part of the Google experience. People maintain their profiles in other apps, why not Google. The Google Profile should be central to your on-line personality.