Google and Facebook rivalry takes centerstage

At the Google headquarters in Mountain View, CA a playful whiteboard hosts an array of doodles in this March 3, 2008 file photo.

SAN FRANCISCO (Reuters) - The technology industry's latest rivalry takes centerstage this week when Internet powers Google Inc and Facebook lay out their competing visions to create a new generation of Web services at a high-profile conference in San Francisco.

The relationship between the two Internet icons has become increasingly confrontational, and the battle will likely intensify on Monday when Facebook is expected to introduce a revamped version of its messaging technology that could pose a challenge to Google's Gmail.

Facebook Chief Executive Mark Zuckerberg and Google Chief Eric Schmidt will each take the stage, along with dozens of other Internet industry heavyweights, during the 3-day Web 2.0 conference that kicks off Monday.

With reports swirling that Yahoo Inc is being eyed for a takeover by private equity firms, possibly in coordination with AOL Inc or News Corp. Yahoo Inc CEO Carol Bartz's talk at the conference on Tuesday will also be closely watched.

And investors hoping for an eventual wave of initial public offerings by a new generation of fast-growing Web start-ups will keep an eye on appearances by executives from Twitter, Zynga and LinkedIn.

But all eyes will be on Zuckerberg and Schmidt, and the pitched struggle for Web surfers' time online, advertising dollars, and increasingly costly Silicon Valley talent.

Investors are waiting for details of Google's social networking strategy. Google has acquired several small social networking companies in recent months and Schmidt has said the company would begin to add social "layers" to its existing products in the fall.

CLASH OF WEB TITANS

Google's Internet search engine and Facebook's social networking service have grown into billion-dollar businesses, amassing vast numbers of users. Now, the two are increasingly on a collision course.

"Once you have that many (users), you want to try to be all things to all people in some sense ..., and I think everything falls out of that," said a person familiar with Facebook's thinking.

"They have similar aspirations and goals," the person said of Google.

The latest flashpoint appears to be email, with Facebook due to unveil "across the board" changes to its messaging service on Monday, according to the source.

Blog TechCrunch reported on Friday that Facebook will unveil a full-fledged Web email product, along with "@facebook.com" email addresses for users, and noted that the product is referred to within Facebook as a "Gmail-killer."

A Facebook spokesman declined to comment.

Last week, Google began blocking a Facebook feature that allows users to automatically import Gmail contact data into the social networking service. Google accused Facebook of siphoning up Google data without allowing for the automatic import and export of Facebook users' information.

They are also increasingly vying for engineering talent in Silicon Valley. This week, Google internally announced plans to boost salaries by 10 percent, according to media reports, in a move viewed as an effort to staunch an exodus of engineers and managers to Facebook.

But the social network itself lost a star engineer on Friday, when Paul Buchheit said he was leaving Facebook to join Y Combinator, a firm that invests in and provides services for technology start-ups.

Buchheit, who worked at Google from 1999 to 2006, is best known as the creator of Google's Gmail. But he would not discuss any Facebook product plans when reached on the phone on Friday.

When reports of Facebook building an email product first surfaced in February, Buchheit said he was not working on anything related to email at Facebook and that he didn't plan to.

(Editing by Edwin Chan and Richard Chang)