I think for this time, this is exactly what Google needs to do to kick facebook out of business. Facebook platform is a proven success. If Google clone it, they will eventually get users.
Google have other sources of income. But for facebook, its just "Facebook.com". If "Google" makes the clone and gets users, facebook.com is almost dead then (read like "myspace").
That's highly unlikely. Facebook benefits from network effects so strong that Google would have to come up with something revolutionary in terms of social networking to replace Facebook.
Why would anyone leave Facebook to join Google's ghost town? Further, Facebook is impossible to successfully clone because part of Facebook's inherent value is that it already has an incredibly large userbase.
You don't have to leave Facebook. And most importantly (and highly likely) you don't need to join the ghost town. You are already there if you are using GMail. Don't you know that after using Buzz?
Why should I, the number of my friends on facebook is tenfold and does not include people that once mailed me about a typo in my blog.
But I'd be careful to consider Google vs. Facebook a done deal. Yes, Facebook has only one service... but Google gets all its money from ads, a Facebook could potentially have a much better profile of its users than Google. If Facebook starts chipping at Google's ads de-facto monopoly, it will really hurt Google.
It will be a good fight for sure. :)