About 24 Facebook developers, led by former Google engineer Lars Rasmussen are working on a new search engine, according to a late last week.
Citing unnamed sources, the report said the project aims to enable users to more easily search Facebook's status updates, posted articles, pictures and videos.
The new search engine could keep Facebook users from jumping off the social networking site to use , analysts noted.
"I am aware of rumors that Facebook is working on a search capability that will slowly siphon off Google search customers," said Patrick Moorhead, an analyst at Moor Insights & Strategy.
"Search is still the number one use of the Web and is the front door for most users. Facebook obviously owns social networking but needs to rapidly grow through generic search and mobile," he added
Facebook, whose is expected to leave it valued at $100 billion, has seen Google move increasingly onto its social networking turf. Since both companies have powerful names and extremely deep pockets, the rivalry is not only important but both sides are well armed.
"It's not surprising that Facebook is working on doing more with search, just as it wasn't surprising to see Google push forward with Google+," said Dan Olds, an analyst at Gabriel Consulting Group. "Google and Facebook are like scorpions in a bottle. And the bottle is gradually getting smaller and smaller as both expand their reach. Over time, they're going to be directly competing in pretty much every area."
Facebook's move to take a bigger bite out of the search market should have Google looking over its shoulder as the social networking firm may have more leverage in the business than Microsoft and Yahoo, whose search engines couldn't unseat Google.
"Search is the biggest and most durable killer app on the Web," said Olds.
"In fact, you could even argue that search is the Web. Owning a successful search engine is one of the keys to the kingdom of Internet riches. Advertisers will flock to you and you can build a lot of ancillary products based on search. If Facebook can build a better search mousetrap, or at least a decent one, they'll have a much more compelling product to sell to advertisers," he added.
Olds noted that Google has a lot of user data, but not nearly as much as Facebook. A strong Facebook search tool, therefore, could prove very attractive to potential advertisers.
Brad Shimmin, an analyst with Current Analysis, however, said Facebook may not yet have the resources needed to overtake Google in a market it has dominated for so long.
"I don't think a Google-like search is a service that will benefit Facebook users," he said.
"That's not why they go to Facebook. Google is an infrastructure. Facebook is a destination. Users look to the two for very different reasons. As with any business venture, a failed attempt to capture an already conquered market, such as Web search, could injure Facebook's overall corporate position," Shimmin added.
It's always risky when a company takes its eye off of what made it successful in the first place, analysts said. To move just part of its focus from creating social tools, especially in the midst of an IPO, is a bit of a gamble, some analysts said.
"The possible downside is if Facebook gets all wrapped around the axle trying to out Google Google," said Olds.
"They won't be successful if they try to build an exact substitute for Google. They need to build something that's uniquely suited to Facebook users and serves them better, or at least as well, as Google's search tools," Olds added.
Sharon Gaudin covers the Internet and Web 2.0, emerging technologies, and desktop and laptop chips for Computerworld. Follow Sharon on Twitter at , or subscribe to . Her e-mail address is .
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