Even the mighty Google (Nasdaq: GOOG) is no match for the web's social-networking darling.

Internet traffic analyst Hitwise is reporting that Facebook received 7.07% of U.S. web traffic last week, barely edging past Google.com's 7.03% slice.

That may seem like a neck-and-neck race, but the trend is even more ominous. Google's market share of visits has grown by 9% over the past year, while Facebook has delivered a 185% growth spurt in that time. In other words, this narrow gap is likely to widen in the weeks to come.

Before you go short Google, keep a few important things in mind:

  • Google also owns YouTube and other popular sites that don't fall under the Google.com domain.
  • Facebook's site is sticky, but it's not as easy to monetize as Google's search engine results. At Google, visitors want to be sent elsewhere. In contrast, users can spend years on Facebook without clicking on an ad, while relevant sponsored entries are hard to ignore on Google.
  • Social networking is hot, but its users can be fickle. Friendster and News Corp.'s (NYSE: NWS) MySpace once seemed unstoppable, too.

Facebook is special, though. It has grown to 400 million active users worldwide, with most signing up over the past two years.




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Source: blog.facebook.com.

Google's Orkut or AOL's (NYSE: AOL) Bebo haven't had those eye-popping spurts -- and likely never will. Searching through Facebook, it's becoming more of a surprise to find who isn't on the site than who has signed up. Whether you enjoy connecting with friends and family, or social gaming, you'd be hard pressed to deny Facebook's appeal.

Monetization will be the site's real challenge. Facebook may know who you are, where you are, and what you like, but it's been slapped around by privacy advocates when it tries to cash in on that knowhow.

The more lucrative paid-search space enjoys a different set of rules. Google, Microsoft (Nasdaq: MSFT), Yahoo! (Nasdaq: YHOO), AOL, and IAC's (Nasdaq: IACI) Ask.com aren't criticized for serving up ads that perfectly target a search query. It's more than just good business; it's what engine users expect.

However, Facebook's gargantuan steps are still a beautiful thing to watch. They make you wonder how differently things would have played out for Yahoo! if it had succeeded in buying Facebook a couple of years ago.

Can Facebook's heady growth continue? Share your thoughts in the comment box below?