News

Facebook Vs. Google

Facebook's vision of becoming a "utility" that offers a platform to keep people online for hours could set it on a crash course with the Web's giants.

In recent days, the No.1 social networking company revamped its search engine and bought a start-up that some call a rival to hot micro-blogging service Twitter. It is also testing a stripped-down version of its service to boost growth overseas and is developing an electronic payments system.

These moves mark a new phase in Facebook's development as the five-year-old company engages the viral power of social networks and its huge member base to barge into new markets.

"When you become the site that people spend enough hours on everyday it's very natural to take advantage of that and to become the site that tries to provide all the services that portals provide," said Haim Mendelson, a professor at Stanford University's Graduate School of Business.

The site, co-founded by 25-year-old Mark Zuckerberg in a Harvard University dorm room, could challenge Web portals like Yahoo and Google (NASDAQ: GOOG) in content and communications, Brigantine Advisors analyst Colin Gillis said.

Facebook, which Zuckerberg has described as a "social utility," could take on eBay's (NASDAQ: EBAY) PayPal online payments system and maybe Apple's (NASDAQ: AAPL) iTunes for digital downloads, he added.

"People only do so many things on the Web," said Jeffrey Rayport, founder of digital media consultancy firm Marketspace. "There are a lot of companies that would like to own that set of activities."

 

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