- Associated Press - Monday, August 30, 2010

NEW YORK (AP) - Google Inc.’s acquisition of startup Angstro shows the online search leader is working to boost its social network offerings as it tries to compete with Facebook Inc. in that market.

Google confirmed the acquisition late Sunday night but declined to give any more details, including how much it paid for the company. Angstro’s co-founder, Rohit Khare, had announced on his blog last week that he’d be joining Google.

Angstro, named after the measuring unit angstrom, seeks to hone in on “highly focused, relevant news” across users online networks _ rather than give users an immense array of random search results, according to its website.

Mountain View, Calif.-based Google is competing with Facebook for eyeballs and ad dollars as its Palo Alto, Calif., neighbor continues to grow its user base and expand its reach around the Web. Facebook recently added its 500 millionth user.

Social networks make up a small percentage of overall online advertising spending, but the number is growing. Research firm eMarketer estimates that social network ad spending will hit $3.3 billion in 2010 and $4.26 billion in 2011. Overall ad spending, meanwhile, is expected to reach $61.8 billion this year and $68.7 billion in 2011.

Shares of Google slid $3.46 to $455.37 in early afternoon trading Monday amid a broader market decline.