I mean if Google wanted to - they could IMHO mow down Facebook. They have waaaay more personal information about all the Facebook users that are also Google users (I believe that is majority of Facebook users), which would enable them to leverage that information and create a much better user experience.
If they could really put their mind to it that is. Unfortunately Google cannot seem to manage that kind of focus - beyond adwords that is. And forget Buzz - that was a miserable failure and probably even wasn't ever meant to be anything beyond Proof Of Concept.
However Google just might be working on a FB killer as we speak. In my oppinion Google has better infrastructure, more resources and is in a position to really give FB a run for it's money.