It's being reported that Google is to upgrade the status feature in Google chat to allow you to send and receive Twitter-style updates to and from your friends. That's an upgrade on existing functionality - which lets you set a status but old updates can no longer be viewed.
In the new version, claims the Wall St Journal (paywall link), there'll be a stream of status updates from people that you choose to subscribe to. It'll be integrated with YouTube and Picasa - Google's photo and video offerings - presumably offering notifications when friends "favourite" a video or upload pictures to the Web.
We'd be surprised if it didn't allow connectivity with this system and the powerhouses that are Facebook and Twitter, too. Statuses will likely be able to be synced across all three systems. Yahoo launched a similar feature for Yahoo Mail back in August 2009.
The rollout could happen as soon as this week, if the paper's sources are correct. When it does roll out, we'll be sure to bring you further details on exactly how it works. Perhaps this'll finally make a success of social media for Google, in a way that Orkut and Jaiku have failed to do.
Update: We might find out more details sooner than we imagined. Google is reportedly planning a press conference for 10am PST on 9 February, which is 6pm here. We'll keep you posted.
Update 2: Google has announced Buzz a new social sharing service.