Say what you want about Facebook (News - Alert), but the truth is, no one can discount its success as a social networking genius. It has quickly become part of our culture, pushing other sites like MySpace (News - Alert) to the back. Even Google’s former CEO knows how well Facebook has done, and now blames himself for not going in the direction of social networking.

Eric Schmidt (News - Alert), now chairman at Google, covered a number of topics at All Things D’s conference, D9, but the most talked about this morning is how he regrets not going social with Google.

"I screwed up," Schmidt said late Tuesday during a 75-minute question-and-answer session.

Schmidt said he recognized four years ago that Google needed to counter Facebook and even wrote memos to that effect.

"I did nothing about the memos I wrote," Schmidt said. "The CEO should take responsibility.”

Facebook is the first large-scale, general way online of verifying and disseminating an Internet user's identity, Schmidt said. That sort of personalization could help with many things that Google does, such as improving search results or providing better driving directions. Schmidt admits that his biggest mistake as the company's CEO was that he didn't react quickly and effectively enough to Facebook.

Earlier, he lamented that Facebook decided to do a search deal with Microsoft (News - Alert).

“They were unwilling” to do a deal with Google, he said, adding that Facebook was first in “disambiguating identity” but that the industry also wants an alternative.

Another one of Google’s failed deals came up briefly, when the company demonstrated its new Google Wallet on stage, where consumers can use their smartphones as credit cards, combined with special offers.

But Schmidt’s admission that, even though he had spotted the new social trend, Google still missed out was something that every CEO in the room was likely taking note of.

"In the online world, you need to know who you are dealing with," said Schmidt. "I clearly knew that I had to do something, and I failed to do it."

Schmidt added that the consumer Internet is now dominated by a "gang of four" companies that want to be platforms for other companies: Google, Facebook, Apple (News - Alert) and Amazon.com. "We have never had four companies growing at the scale that those four are in aggregate," he said.

"I have a feeling there's a platform war under way," he said. "If you look at the industry as a whole, there are four companies exploiting platform strategies very well. We can debate who is fifth or sixth, but let’s concentrate on the four."

"Each is a consumer brand that provides you something that you could not do otherwise," Schmidt said.

Schmidt left Microsoft off the list. When asked about this by AllThingsD's Walt Mossberg, Schmidt said, "Microsoft is not driving the consumer revolution in the mind of the consumers."