Google Inc. (NDAQ:GOOG) is rumored to be developing its own social network to compete directly against Facebook just days after losing its bid for a piece of the pie, according to TechCrunch. The new social networking platform will reportedly allow developers to build applications and focus on the U.S. marketplace as opposed to the foreign users attracted by its Orkut project.

The new project, code named Maka-Maka, is Google's attempt to build a social layer across all of its applications. The tech giant is reportedly planning to unveil this project in stages beginning in November. The new project is being built to combine all of Google's apps and services, which many people already use. Contacts are in Gmail, feeds are in Google Reader, IM buddies are in Gtalk, upcoming events are in Google Calendar, and even search history.

Google, however, has had problems converting its past projects into sustainable businesses. Its search business continues to be its largest by a long shot while adoption to Gmail, Gtalk and other new services has been somewhat slow. And let's not forget Google's existing foray into social networking through its Orkut network. This has been wildly successful outside of the states with over 24 million users but failed to penetrate the US market other than 500,000 users.

Social networking sites like Facebook have also experienced problems converting pageviews into profits. It turns out that these users tend to click ads far less than traditional web properties, making them substantially less valuable unless companies can figure out how to get money through more traditional methods.

In the end, this is good news for shareholders if Google can actually convert this into a profitable network for ads. Otherwise, this project could simply be another capital intensive spend for Google's shareholders who have already forked out countless dollars towards other projects. Regardless, GOOG is definitely going to be in the spotlight ahead of this project release.

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