The fascinating thing for me about Google+ is not the Circles, per se, but the strategic use of non-transparency. Circles are diffuse clouds of relationships. I can decide whether someone is a “friend”, “acquaintance”, or just someone I “follow”, but that person and the rest of the world just see that they are “in my circles.” It’s like Twitter’s 140-character limit: an arbitrary design choice with powerful implications.
The hidden information dramatically changes the social dynamics. It avoids the social awkwardness that sometimes attends a Facebook friend request, and the all-or-nothing consequences of accepting a friend. On the other hand, it creates ambiguity. Having +Mark Zuckerberg in my circle means nothing, but we’ve been trained by prior social networks to read a two-way connection. There are times when I want the rest of the world to know who my friends are. You can bet that there will be lots of gaming of the system. Lesson from game design: there’s always gaming of the system.
It will be interesting to see how Google handles this. They could easily change the design or add a user option, but that would create far-reaching, unpredictable results for the communal culture on Google+. It may not be a bad thing to continue on the current path, in which Google+ relationships are fundamentally different than those on Facebook, LinkedIn, or Twitter. So many connections simply don’t map into “friendships.” It would be harder for Facebook to turn its Groups into something closer to Circles, because Facebook is built so deeply around the social graph, which is an explicit network of relationships.
In short, Facebook=Social Graph, Google+ = Social Cloud.