Problem solved by reading Google Play Services Guides
- Make a copy of the Google Play services library project. Copy the library project at
<android-sdk>/extras/google/google_play_services/libproject/google-play-services_lib/
to the location where you maintain your Android app projects. If you are using Eclipse, import the library project into your workspace. Click File > Import, select Android > Existing Android Code into Workspace, and browse to the copy of the library project to import it.
You CANNOT use the lib project in SDK folder DIRECTLY... What a joke..