Would you like to see your phone contacts become part of your Google social circle? It’s possible that this may be on the horizion. Google’s former CEO and current Executive Chairman Eric Schmidt talked about using phone contacts as part of the company’s social efforts in a London Evening Standard article. Here is the relevant snippet:

What about Facebook as a competitor? Schmidt believes Google has a future in social networking – but of a different sort. “We are particularly good at search, advertising, maps, YouTube, navigation, other internet services. What we are doing is basically trying to get people to either give us or discover their ‘social graphs’ … A simple version of your social graph is your friends on Facebook – and an even more interesting list of your social graph is the people on your phone, right? By the way, who has the largest number of phones, smart phones?” He grins like a digital Cheshire cat. “Mm, we do.”

Hat tip to Matt McGee, who brings up some privacy concerns related to this concept, saying, “Google has previously used personal contact information to try building a social graph. That happened during the Google Buzz launch, when Gmail contacts were automatically added to users’ Buzz network. That prompted immediately negative backlash in some quarters, not to mention a number of lawsuits and an eventual settlement with the FTC.”

Google is certainly no stanger to government scrutiny, and it’s not hard to imagine something like this coming up with regards to phone contacts and Google’s use of them. Still, use of phone contacts from Android devices makes plenty of sense to me. Perhaps they should go about it in more of an opt-in way than they did with the Buzz launch, but people in your phone contacts are people (and businesses) you are connected with. As long as it’s done in a way that the use has control, I don’t see a problem with it. Many phones are already synching phone contacts to Facebook data anyway.

Google is already using your Gmail contacts as part of your social circle, which it draws from in its delivery of social search results.

Whether or not Google should still be considered a “search company” is debatable. On the one hand, search is at the core of most of the company’s efforts. On the other hand, the company has its hands in so many different cookie jars, to say it’s simply a “search company” seems to dilute the signifiance of this. “Search” has been eliminated as a product group within the company in favor of a “knowledge group,” according to a recent report from TechCrunch, though just the other day, Google launched its first official blog dedicated solely to search. Either way, it’s clear that Android is a very important part of Google’s strategy, and one that the company has put a great deal of resources into. It only makes sense that the company leverage this as much as possible to improve its core business.

The lines between phone communication and communication through Google are already getting much blurrier anyway. Android users are searching on Google, and they already have click-to-call features. They use Gmail and various other Google products on their phones. Then there’s Google Voice. Google is already a large part of the phone equation for many people. This could end up being a powerful weapon in the company’s battle in the social space.