Google Acquires Startup to Boost Social Network

Google Acquires Startup to Boost Social Network

Google acquired Katango, a startup whose technology sorts Facebook friends into categories, in a likely effort to boost its Google+ service against rival Facebook.

“Katango was founded a little over a year ago to develop social algorithms that improve people’s online social interaction,” the startup announced. “We’re excited to join the Google+ team and carry on fulfilling that mission.”

The acquisition is a mysterious one, as Katango earlier received $5 million in funding from Kleiner Perkins Caufield & Byers, which manages Facebook’s $250 million sFund. In other words, Facebook indirectly invested in Katango, which now belongs to rival Google.

Neither Google nor Katango commented on how the purchase may help Google+ and its 40 million users. Some analysts speculate the search giant will use the startup’s algorithms to sort people’s contacts into Circles, a Google+ feature that is similar to Facebook lists.

However Google uses Katango, the purchase will likely bolster the Mountain View, Calif.-based company’s fight against its Palo Alto-based neighbor.

Google has been rolling out weekly updates to its social network in an effort to win a “features race” against Facebook. Google+ now supports Zynga’s CityVille, besides featuring the Creative Kit photo editing toolbox, efforts that may draw people looking for more than social messaging on the site.

Google+ opened to businesses this week as well, and already claims organizations like Macy’s, Toyota, H&M and even the Dallas Cowboys. The arrival of companies on Google+ likely means more social network advertising dollars, which Facebook had until now claimed almost exclusively.

Google also bought PostRank in June to measure tweets and Facebook status updates across the Internet, likely hoping to improve its advertising prowess. The tactic appears to be working, as the search giant posted a 25 percent profit increase from advertisements in the third quarter.

Google’s efforts to ramp up its social network are in full swing and may prove a challenge to Facebook, especially if the Mountain View-based company continues its weekly upgrades and acquires startups like Katango to help boost the Google+ experience.

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