A year ago Google launched 'Wave' as an attempt to take 'market' share from Facebook, integrating IM, email and comments etc in a single package. I remember Randall commenting about how good it could be.
Now bearing in mind that I'm relatively tech-savvy, the whole thing seemed ill-defined and confusing to me. Although it *might* have actually been easy to use, all the promo materials and descriptions from the Google people seemed specious and lacking reality. It is therefore of little surprise that it's been canned after just a year, simply because as they put it 'it couldn't get traction' or as I'd say 'they made us an offer we couldn't understand'.
The way to beat facebook must be obvious, surely? Create a similar site that is fast, solid, easy to use and understand. And especially, one where you don't keep moving the goalposts and annoying the users. Making it look clean and cool won't do any harm and filling it with mindless farming, catering and jewel-gathering games may also help. I guess it's good that Google funds projects like this, creating employment for otherwise out of work programmers and marketing staff.
* I apologise for this. It's become one of those words, like 'teh' and 'powned' that are strictly net-centric, but also seem to fit descriptions of internet goings-on. If you've never seen the pear with the mouth apparently saying 'LOL Wut?' you've not missed much, really. It may even have a real name.