Google loss is facebook gain
Both Google and facebook started as a small start-up web sites by university students in their college dormitories. In both cases they didnt know that one day their product will turn out to be the most visited web pages on WWW.
Google was founded by Larry page and Sergy Brin in Stanford university in California in 1996 and was initially called PageRank. On the other hand facebook was founded by Mark Zuckergberg in Harvard University in 2004 and was initially called Thefacebook.
Since then Google has become the Big Brother of search and web advertising and facebook is the largest social network website with more than 135 million unique user per month. Since both companies work in different domain, their path hardly crossed each other past until the start 2010.
For the first time in March 2010, more people have visited facebook than google. Google also have a product called Orkut which is market leader in India, Brazil and some other countries. How ever facebook have now penetrated these regions as well and growing rapidly.
Second reason is advertisement gain by facebook. Currently Microsoft is the only banner advert provider to facebook. Although the click rate for facebook is low, but considering the volume of page view this is a huge amount which is largely coming from young population. As younger population are the largest chunk of net surfer, facebook is eating a huge chunk from ad money which was earlier going to Google way.
Third reason is that facebook started its own email service in October 2010 and now can have their own email@facebook email ids. Google's Gmail is the largest email service provider after Hotmail and a big source of its income. With its new email service, all the facebook user should naturally move to facebook mail service as they will not have to open a new window to check their email now. That means facebook will automatically get around 150 million user to its new mail service just after its launch which is higher than current Gmail subscription.
Fourth and the most worrisome reason for Google is that its biggest asset i.e, its talent pool is slowly moving to join facebook now. It has been reported that out of 1700 + employees around 150 have been snapped from Google. Reason for this movement is that Google have become too bulky and become bureaucratic due to its rapid growth which is quite opposite to the reason why best brain joined it when it was growing. On the other hand, facebook is there where Google was 6-8 years back and still have informal environment. Quite recently Google announced 10% pay hike for all its employees and also divided the annual bonus in each month salary so that take home salary can become better.
Its still unknown how this rivalry will take both companies but its quite clear that competition will give more powers to its user and invoke more innovation.