The search engine giant will unveil Google Circles at its Google I/O conference in May, reports technology blog The Next Web.
Apparently, the new network will allow users to selectively share content with people who are members of different social circles in their lives. Users will be able to filter what content is shown to which group.
While Google has refused to confirm or deny any plans for a social network, industry analysts say that the company is unlikely to put itself in direct competition with Facebook.
"Whatever Google comes up with, it almost certainly won't be a competitive social network that mimics Facebook," Matt Rosoff. "That ship has sailed – Facebook has 600million users, and nobody's going to join yet another social network to share photos and status updates with friends."
Third time lucky?
Google has tried to ride the social networking wave twice before, the last time proving a public relations disaster.
Just days after unveiling Google Buzz in February 2010, the company was forced to announce a massive overhaul after receiving a deluge of complaints.
The new media tool allows users to share messages, web links, photos and videos with friends and colleagues directly within Gmail.
But when it launched it automatically linked users with other people they were judged to contact the most.
In their eagerness to kick-start the project, Google failed to recognise many users would resent being 'followed' by others without their agreement.
Following the criticism, they created a new tab within Gmail will make it easier to opt out of Buzz altogether and apologised to its users.
In 2004, Google launched the Orkut social network. But while Orkut is big in certain overseas markets like Brazil, it failed to attract users in the UK and U.S.