In a letter to investors this week, Google CEO Larry Page expressed Google’s goal to create “a beautifully simple experience across Google”. That’s what the company’s controversial privacy policy change is all about. It’s about tying all of Google’s products together as one Google.

Should data from the various Google services you use be integrated with one another? Tell us what you think.

“Think about basic actions like sharing or recommendations,” wrote Page. “When you find a great article, you want to share that knowledge with people who will find it interesting, too. If you see a great movie, you want to recommend it to friends. Google+ makes sharing super easy by creating a social layer across all our products so users connect with the people who matter to them.”

“When you sign up for Google+, you can use Circles to group people into different categories, such as ‘Friends,’ ‘Family,’ or ‘Rocket Scientists,’ and then engage with them just like in real life,” he continued. “You can recommend great news articles, websites, and videos to specific Circles, or share photos with ‘Family’ straight from your Android device. And the photos are even uploaded for you automatically! To follow people with shared interests, such as photography, just add them to your Circles. And you can share your own ideas with the world, or a smaller group, via the Google+ Stream and have others respond.”

“It’s still early days, and we have a long way to go,” he noted. “But these are tremendously important changes, and with over 120 Google+ integrations to date (including Google Search, YouTube and Android), we are on the right track. Well over 100 million users are active on Google+, and we’re seeing a positive impact across the Web, with Google users being able to recommend search results and videos they like—a goal we’ve had ever since we started the company.”

Now imagine that Google+ had over 800 million users like Facebook. You might be surprised to know that in some ways it already does.

Google’s Vic Gundotra recently explained that Google counts active users as users who sign into Google+ and use another Google product within a month. Google may not be up to the 800 million mark in that regard (though they’re an 1/8 of the way there apparently – not bad for less than a year), but if Google+ is really just a social layer over Google products, you have to consider that Google has a lot more users than that. YouTube itself, in fact, has over 800 million.

Now consider that Facebook is working on its own search engine. It may only be internal (at least at first), but at 800 million users, even that in itself is enough to potentially take some searches away from Google. In a recent article on this subject, I wrote:

I’ve long maintained that the biggest threat to Google’s search market share is likely not the threat of a single competitor, but the diversification of search in general. People are using more apps than ever (from more devices than ever), and just don’t have to rely on Google (or other traditional search engines) for access to content the way they used to. Take Twitter search, for example, which has become the go-to destination for finding quick info on events and topics in real time. When was the last time you turned to Google’s realtime search feature? It’s been a while, because it’s been MIA since Google’s partnership with Twitter expired last year. Sometimes a Twitter search is simply more relevant than a Google search for new information, despite Google’s increased efforts in freshness.

One Googler told me he thought this paragraph was “dead-on”.

Even if Facebook doesn’t come out with an actual web search engine in the style of Google or Bing, significant improvements to Facebook search (with the right marketing behind it) could chip away a nice chunk of searches that would otherwise go to Google.

But, before we get too far off base here, the point is that Facebook as a whole is a direct competitor to Google as a whole. If you look at it from this perspective (which seems to be the way Google looks at it), search is just a feature. Facebook certainly favors Facebook results in Facebook searches. Web searches are only added on at the end via Bing.

“Activity on the Google+ Stream itself is increasing too,” said Page. “We’re excited about the tremendous speed with which some people have amassed over one million followers, as well as the depth of the discussions taking place among happy, passionate users—all evidence that we’re generating genuine engagement. When I post publicly I get a ton of high quality comments, which makes me happy and encourages me to keep posting. I strongly encourage all of you to follow me on Google+—I love having this new way to communicate and share with all of you!”

In a different portion of his letter called, “next-generation search,” Page basically discussed Search Plus Your World, and a bit about delivering more direct answers in results. Search Plus Your World, if you’re unfamiliar, is the personalization that Google launched earlier this year, which initially put a great deal more emphasis on Google+ content in search results.

It still does this, but Google seems to have toned it down a bit. At one point, Google was ranking Mark Zuckerberg’s Google+ Page over his public Facebook profile, which made no sense in terms of relevancy. Google was also ranking the WWE’s Google+ page over its Twitter account, even though the Twitter account was much more popular.

In both of these cases, the Google+ Pages are no longer outranking their more relevant counterparts, with SPYW toggled on or off. This may or may not be a direct result of a recent algorithm change. Earlier this week, Google posted its monthly list of algorithm changes. One of the things on the list was:

Better indexing of profile pages. [launch codename “Prof-2”] This change improves the comprehensiveness of public profile pages in our index from more than two-hundred social sites.

Plus, as another Googler recently told us, “Search plus Your World builds upon existing search features such as Social Search, personalized search, and authorship,” some of which Google has had in place for much longer. “You will continue to see existing Social Search features including +1s and content shared by your connections on Google+ and other sites. We’ll continue to look at your Google+ profile to see other content you’ve published online and linked to your profile.”

So what makes one profile more relevant than another? That’s a tricky question that Google is likely to continue to struggle with. It’s not always as easy as the Facebook CEO and his Facebook profile vs. his Google profile. It’s not necessarily as simple as which one has more followers either. The WWE’s Twitter account may have more followers than its Google+ account, but if you don’t use Twitter and you use Google+, the latter is most likely more relevant to you.

Google will likely continue to struggle with relevance vs. social/personalization. It must be hard to grow a social network when you have to promote a rival social network’s content ahead of the content from the one you’re trying to build. Facebook doesn’t have that problem. You wouldn’t go to Facebook and complain if you searched for “Larry Page” and it delivered you a Facebook Page for Larry Page rather than his Google+ profile.

So, as Google has already established itself for years as a web search engine, it faces some major hurdles in this chess match with Facebook that Facebook may not have to worry about, and even if both companies are headed to similar futures (at least in the social and search space), they come from very different backgrounds. They’re both working to the middle of one spectrum from opposite sides – Google from search moving towards social, and Facebook vice versa.

Facebook, at least has the social data to begin with, and is able to partner with another major search engine in Bing, along the way.

From Page’s letter, it is clear that Google is still more focused on search than on social as the overall strategy, with social simply being a means to improve search. But if Google+ is its social strategy, and Google is already favoring Google+ less in its search results, can Google win this battle? What do you think? Let us know in the comments.