About 24 Facebook developers, led by former Google engineer Lars Rasmussen are working on a new search engine, according to a report in Bloomberg Businessweek 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.
"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 upcoming IPO 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.