Technically Facebook has the same functionality but it's much harder to find and use the Facebook equivalent. Circles allow you to assign all your contacts in G+ to one or more groups. You can classify people by geography, by hair color, by gender, first initial or anything your heart desires. In short you can create your own etymology and arrange things any way you want. There is one other important bit of information to keep in mind here, circles are one way so only you know who is in a particular circle.
Facebook and their fans claimed early on that Circles discouraged sharing. There were two fallacies at work in that claim. One, that unfiltered sharing is inherently good and two that having the ability to filter wouldn't encourage additional sharing over and above what people typically do on Facebook since with circles you can be selective about who you share with and are thus more likely to post things you wouldn't otherwise. I know that my posts on Facebook tend to be very bland and generic because I have such a diverse group of friends.
There is an aspect of Google's Circles that I haven't seen get a lot of press. Google claims to make their living by organizing the worlds information. It's true enough in a sense but at the end of the day the reality is they make their money by selling lots of highly targeted ads. To date they've left G+ ad free but that doesn't mean they aren't already making money. My thinking is as follows; the reason Google is so good at providing highly targeted ad placement to their customers is that they can infer a lot about us based on how we interact with their services. Over time they are able to build up a detailed picture of who we are and what our likes and dislikes are. It's kind of creepy in a way but we got ourselves in this mess because we're suckers for the proverbial free lunch. There is no free lunch and this lack of privacy is the way we pay for our place at the table.
With Circles Google has created an incentive for us to classify all our contacts in a way that provides information about ourselves, and others. Google's data gathering has always worked best when we are given an incentive to participate such as search.Only you know who is in a particular circle and what you've named that circle. While Google doesn't make this information public, they are privy to it internally and can infer many things that would be useful in helping them do an even better job of targeting ads. Better targeting means better click through rates and better click through rates mean higher revenues for Google and happier advertisers.
Google needed to make a credible entry into the social networking arena but that was just a means to an end. Search provides them not only with a billboard but also with a way to get to know us better. It's unlikely that the need for search will ever go away but there is a good chance it will be less important in the future and it's also possible that Google will not be able to maintain their current dominance. The G+ service provides them with an additional opportunity to gather information about us and generate ad impressions.
Image by kiwinz via Flickr
