I disagree. I worked at Google for a year in 2010, around the time of the first reorgs around social. They were decimating teams like Calendar, Sites, and other products with millions of users that were stagnating, as far as they were concerned, and building a team 200-strong to take on "social" -- whatever that means. We joked that no one at Google knew what it meant. We felt Google was deeply clueless about the nature of social networking products. The restructuring was very top-down and heavy-handed, and it was apparently just the beginning.
In fact, if you're looking for hindsight vs reality, I don't think Google and Facebook really were competitors -- until Google decided to build a copy of Facebook's product. So what if both sites were monetized with ads, whoop-dee-doo. The overlap in their product functionality and expertise was basically zero. There's a very abstract connection that comes out of Google's central dogma: We are how people find things on the Internet. We are how they discover links. We're their homepage. What if Facebook takes all of that away? We have to eat their lunch.
Google acted out of some combination of fear, insecurity, and pressure from Wall Street, along with some grandiose thinking about their role in the universe and the threat of Facebook. I believe the changes inside Google are significant, and also not inevitable or "what anyone would have done at the time." We'll see how the effects play out.