Google’s social inner circle expands with new recruit Max Levchin

In a rare move for an outsider, Google has named Max Levchin, former CEO of Slide and cofounder of PayPal, a vice president of engineering, Inside Facebook reports.

At Google, where titles are doled out carefully, the announcement is a powerful signal of his influence. It comes after the company closed its acquisition of Slide, valued at around $182 million, two weeks ago. Levchin, who invested $7 million of his own money in Slide in addition to running it as CEO since its founding, reportedly took home around $39 million from the acquisition.

Levchin will be “working with a variety of teams on social products”, making him the company’s latest feather in its social cap as it gears up to wage war with Facebook. Interestingly, the appointment puts Levchin at equal rank with Vic Gundotra, also a VP of engineering at the company, who had previously been reported as leading the initiative which some are dubbing “Google Me.”

With Levchin, it’s not hard to see why Google made an exception to its cultural practice of shunning outsiders: The Ukrainian-born entrepreneur was among the first to recognize the potential of social networks, first in seeing PayPal’s email money transfers spread from user to user and then founding Slide in 2004. He’s surely one of the reasons Google bought Slide.

Levchin’s role in Google’s social initiative is likely to center around the platform and applications side of the company’s social efforts. With Slide, it has a bevy of still-popular applications such as SuperPoke and FunSpace. But more notable than the apps themselves are Slide’s swift opportunism in embracing new social platforms — first photo sharing on MySpace, then social apps on Facebook. Levchin could help Google design its own social offering to cater to developers like him, and thereby accelerate its growth.

Google is serious about social, and it shows from the company’s recent moves, such as its embrace of an outsider like Levchin. After a number of false starts in the space, this may well be its last stab at making it work. One question remains: Will Levchin and Gundotra form an effective social network within Google?