Rumor has it that Google plan to launch their Facebook competition at the next Google I/O which is on May 10 - 11, 2011. There is not much else to know right now apart from it 'may be happening'.
Back in September of 2010, Google CEO Eric Schmidt suggested that a "social layer" was coming to all Google products. Facebook CEO Mark Zuckerberg has always been weary of such things saying that a social layer does not cut it, a service needs to be built from the ground up with social in mind.
But, less than two months from now we'll know if Google is indeed releasing it's own social networking competition to Facebook.