But how much of a "runaway success" is it really, if the product makes no money? It's true, Google created a service which ended up being the best of breed and loved by all, but which had to be modified from it's original design in order to make money and support a business.
The problem is that, as long as Google "owned" the Web, as they seemed to do for some time, they could avoid impacting their flagship service with much intrusive ads, because the sheer scale of their usage made enough money with minimum ads. However, this is predicated on Google being the de facto portal to the Web and all online services and destinations.
The truth is that they didn't contemplate this changing, or at least not so soon.
It's not that Google needs to be Facebook in order to survive in the current marketplace; it's that they need to be *something else* than what they are right now. People are accessing online services through myriad other resources that are not Google, and "Web Search" is much less relevant at the moment.
Some may call these "silos," but in essence, they are specialized utilities. Just like the electric company provides you electricity and the water works company provides you with water and sewage service, different online resources provide different services. That they require discrete information from you to do this, well, that's par for the course--the water and electric companies also need to know where you live and how you like to pay, and by extension of you being a customer, will always know how you consume their services.
Google chose to be Facebook, because they thought that turning search algorithms for online web pages into a social-graph analysis machine would be simple (perhaps it is), but mostly because Facebook was raking in the money, and Google wanted some of that.