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The Google contacts manager is an investment that Google has woefully under invested in, but is a feature that is incredibly powerful.

Containing all the email addresses I’ve ever contacted, the data set is comprehensive. Combined with the frequency of contact data both in synchronous and asynchronous communication, there’s enough data to intelligently rank and categorize my contacts by priority and perhaps even context (work, play). Plug these contacts into Google Voice and instantly there’s a data set for phone records as well.

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Setting aside privacy concerns, it’s clear that the data set is rich with possibilities. It’s also clear that contacts have become essential to most users, evidenced by the epidemic of social networking use. For Facebook, the graph is the most valuable part of the site because it’s that network that gives rise to everything else: games, communication and interaction.

Google must place contacts and interactions at the center new products because social is the next wave of innovation. There are signs that this is happening, but slowly. Google profiles appear in search; OpenSocial has been adopted at MySpace and LinkedIn, among others.

The coup de grace would be enabling users to combine all their social networks, all their contacts, to be stored in one place and syndicated to each network on demand. Since email transcends context, Google contacts likely has work connections, personal connections, long lost friend connections – in other words, portions of the MySpace, Facebook and LinkedIn graphs.

Intelligently combining those data sets, using machine learning to intelligently categorize and group existing contacts, and leveraging existing knowledge on the web, Google contacts might be able become a social hub for many users.

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