Google competes with Facebook by developing an open standard for social web applications.

Microsoft recently bought a stake in Facebook, one of the most popular social web destination with some 50 million members. Facebook has revolutionized this market by allowing others to develop plug-ins or applets for Facebook, delivering a large number of new applications to Facebook users.

Google has its own social networking site, Orkut, but that one is small compared to Facebook. So what does Google plan to do about this?

CNN Money/Fortune reports that a dozen companies, including Oracle and Salesforce.com as well as social networks LinkedIn, Ning, hi5 and Orkut will make use of Google’s OpenSocial program.

Update Nov 2 2007: OpenSocial is now joined by MySpace, the most popular social network of all, as well as Bebo and SixApart. This might force Facebook to join as well.

The idea is to create a standard for applications that will work on any social site (or any site for that matter).

John Battelle refers to an unreleased Google press release which announces a developer sandbox for developers. They can use this service to test the OpenSocial APIs. Interestingly enough that site is hosted by Google’s own social network, Orkut, and it requires that you sign up for a Google/Orkut account. (The link is not working — at least not yet).

There will apparently also be a OpenSocial resources site for developers and websites at at code.google.com/apis/opensocial. However, that link is not working at the moment either.

Will this strategy make any difference? Well, probably not as regards Google’s chances of beating Facebook. Facebook has already reached a critical mass that Google will find very hard to compete with. Google knows this, at it has achieved the same effect on the search engine scene.

On the other hand, this new API will make it more tempting to develop applications for more sites than Facebook, which will at least weaken one of Facebook’s competitive advantages. The winners are any social website that allows the use of such code.

CNN puts it this way:

“For starters, Google will be sharing critical APIs—in this case, datastreams that divulge a user’s profile information, who their friends are and what applications they install. (Among other things, that info helps applications spread virally since people see which applications their friends just installed.) While Facebook does the same thing within its closed network, twice as many people are in the Google alliance—100 million—and it’s just getting off the ground. Better yet for the developers, Google isn’t extracting a penny from them. They can keep 100% of the revenues from advertising or referrals.”

We guess it won’t be long before there appears simple tools for adapting these applications to weblog software and regular web pages.