You can bet that Google won’t be repeating this when it launches its planned Facebook challenging social network, possibly called Google Me as it pays out $8.5m to settle a class action privacy case stemming from the launch of Google Buzz.

Clearly this is not about the money, the amount is chump change to the search firm, but it does underscore how badly thought out the launch of flop Google Buzz was.

The pay out follows Google being forced into an embarrassing climb down with Buzz shortly after launch when it added its social networking bolt on to its Gmail service in February. The payout according to an AFP report says that lawyers will get 30% of the cash while the seven money making plaintiffs get $2,500 each. The rest of the cash is to be deposited in a fund by Google for organizations devoted to internet privacy or education.

As part of the settlement, Google has been told to “do more to educate people about privacy at Buzz”. Maybe something would have been useful at the beginning of the process and not for instance automatically taking my Gmail contacts and adding them to the public Buzz network. Just an idea.

Google has since made changes to the Google Buzz user interface that clarify Buzz’s operation and users’ options, but its all a little late after it so deftly turned an opportunity into a real social media snafu. I’m sure Google will ride this wave out.

Google Me, the rumoured Google social network that might/might not challenge Facebook’s might, appears to be getting close as it continues to snap up social media firms to build its social media deck.

Last week Google acquired social network Angstro. Prior to that it picked up social app firm Slide and social payments business Jambool. The shopping spree came to ahead in August when it bought mobile social app maker Social Deck.

Add to that the activity reported at the end of July when the Google social networking story continued to move with stories saying that discussions were being held with games developers to make their games available on what might be called Google Me.

It has all the bits, but it seems it has also learnt its lesson with Google Wave and Google Buzz and is not rushing into anything. Tick tock.