The competition between Google+ and Facebook continues to heat up. Facebook has made moves recently that make its sharing and friends lists a little more Google+ Circles-like. They also launched “smart lists” where Facebook compiles lists of your friends on its own in ways that it thinks make sense.

Google appears to be looking to go a similar route, as TechCrunch is reporting that Google is in talks to acquire Katango. Katango is essentially a Facebook app that categorizes your friends into lists that it thinks make sense. We don’t know for sure what Google would do with this acquisition, but it seems fairly likely that they would use this approach with Circles.

Google+ does come with some pre-made Circles, but this could possibly be used to improve this concept and make even smarter Circles. Just speculation.

Katango launched in July, then in August, it released a web app.

The company has a team of 12 people. Co-founders are Yoav Shoham, and Mike Munie. According to Jason Kincaid, the company has raised $2 million so far.

Google recently added the ability to share Circles. It’s a little surprising that Facebook doesn’t let you share lists. Twitter has been doing this for a long time.