A really good article: The Inside Story of Graph Search on Wired. Has lots of details on it actually works and how much of an effort it was to make it.
The potential? Immense:
Another big agenda item is assimilating the massive amounts of data generated by third-party applications. (For instance, imagine using Spotify to see who among your extended cohort has been obsessively listening to Laura Nyro. Or tapping into fitness apps to find a jogging partner who runs at the same track and same pace as you do.)