Facebook prepares to launch its “Gmail killer”

The rivalry between Facebook and Google is set to be ratcheted up a notch today with the launch of Facebook’s fully fledged email service.

The relationship between the two internet icons has become increasingly confrontational in recent weeks, and relations will be tested even further with today’s expected launch of Facebook’s revamped messaging service. The service will include an @facebook.com email address for every user, and is being 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.

Facebook chief executive Mark Zuckerberg and Google chief Eric Schmidt will each take the stage, along with dozens of other internet industry heavyweights, at a three-day Web 2.0 conference that kicks off today.

With reports swirling that Yahoo is being eyed for a takeover by private equity firms, possibly in coordination with AOL or News Corp, Yahoo 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.

Google’s social-networking strategy

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 autumn.

Google’s internet search engine and Facebook’s social-networking service have grown into billion-dollar businesses. Now, the two are increasingly on a collision course.

They are also increasingly vying for engineering talent in Silicon Valley. Last week, Google announced plans to boost salaries by 10%, 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.

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.