Currently the use cases for Facebook and for search are quite different.But what are Facebook and Google's core businesses?
Facebook is entertaining, Facebook is fun, Facebook kills time, Facebook enables me to keep in touch with people. But Facebook, generally speaking, is not "useful" in the sense that Google is.
For its part, Google delivers information efficiently but is generally not "entertaining" or "fun."
It's very likely that the two sites will simply co-exist fulfilling different types of needs and interests ... Neither can be expected to fundamentally undermine the core business of the other.
It is true that the uses of Facebook and Google differ. People mostly seem to go to Facebook because they find it entertaining. People mostly go to Google because it is useful.
But, the core business of both, where they get their revenue, is from advertising. And, while Google's search advertising does quite well, they have struggled much more in non-search advertising. And non-search advertising is the problem Facebok needs to solve.
Toward the end of the Fred Vogelstein's Wired article (which Greg Sterling references), Fred pinpoints the critical area of conflict:
Facebook [is] confronted with a difficult challenge: turning [their] massive user base into a sustainable business.
[Google] inked a disastrous $900 million partnership with MySpace in 2006, a failure that taught them how hard it is to make money from social networking. And privately, [Googlers] don't think Facebook's staff has the brainpower to succeed where they have failed.
"If [Facebook] found a way to monetize all of a sudden, sure, that would be a problem," says one highly placed Google executive. "But they're not going to."