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Let’s face it: web industry wars over users are really nothing new: Microsoft v. Apple, Yahoo v. Google, Facebook v. Twitter. For the past 15 years, we’ve all watched as numerous contenders have set foot in the ring, talked their trash to their opponent, and proceeded to either win with a TKO or get their HTML handed to them on the playground. This time, however, might be a little different.

This time around we have the current two biggest heavyweight web contenders entering the ring: Google and Facebook. And both are looking to hit each other where it hurts.

What Google’s doing
According to reports (but yet to be confirmed by Google’s CEO), Google is creating Google Me, a full, first-class social network (that will act as Google’s social chess piece) in their biggest attempt yet to take down Facebook. Rumored to be launching in October, it’s speculated that Google Me will be an OpenID project modeled after Facebook. The intrigue began when Digg CEO Kevin Rose tweeted that he’d heard a “huge rumor” that Google was planning to launch a Facebook competitor. Then he deleted the tweet. Then Adam D’Angelo, former Facebook CTO and now founder of Quora (a hot online Q&A service), put in his two cents in an answer thread on Quora:

Here is what I’ve pieced together from some reliable sources:
-This is not a rumor. This is a real project. There are a large number of people working on it. I am completely confident about this.
-They realized that Buzz wasn’t enough and that they need to build out a full, first-class social network. They are modeling it off of Facebook.
-Unlike previous attempts (before Buzz at least), this is a high-priority project within Google.
-They had assumed that Facebook’s growth would slow as it grew, and that Facebook wouldn’t be able to have too much leverage over them, but then it just didn’t stop, and now they are really scared.

Add in TechCrunch’s report last week that Google just bought Slide, a social apps platform with a price tag ranging from $182 million to $228 million, and it becomes even easier to see that Google Me is picking up steam.

What Facebook’s doing
Last week, Facebook staged their own counter-offensive against Google with the launch of Facebook Questions, a new question-and-answer service for all 500 million users on Facebook. Still in beta phase, Facebook Questions is not considered to be a traditional search engine, but it does address many of the same user needs (meaning it’s still a heavy punch to the Google gut).

Facebook Questions was developed based on new knowledge that many users now rely on their Facebook friends to discover content and products that they can purchase on the Internet. According to Reuters, Facebook Questions “allows any Facebook user to tap into the collective knowledge of the vast Facebook community for recommendations about restaurants and music, gardening tips, or whatever else tickles their fancy.” And since much of the content generated by users on Facebook is generally kept out of view of Google’s search engine, Facebook Questions could inevitably mean less searches on Google, and less money for Google.

I’m Game
The heart of the fight between Facebook and Google is expected to center around the fast-growing market for Internet games. The young but momentum-gaining gaming market has exploded over the last year or two, vastly increasing the link between social gaming developers and social networking. Games could be the next biggest market within social media, and Google is looking to dominate Facebook.

Currently, game developers pay Facebook 30% of the earnings from virtual-good purchases in their games. However, Google currently owns a financial stake in Zynga (creator of Farmville (60 million active monthly users) and Mafia Wars), and is looking to possibly partner with Playfish and Playdom. Google also already has an online payment mechanism called Checkout that could be used to collect payments for social games on its platform.

Why is gaming going to be such a big deal? Two words: Cash. Flow. According to the Wall Street Journal, in countries such as China and Japan, social games generate billions of dollars in revenue. In the U.S., social gaming was a $700 million market in 2009, according to estimates by ThinkEquity LLC, a research firm. That figure is supposed to triple by 2012, the firm said. All in all the gaming market is not a bad choice to line your pockets with.

All of this is great, but…
Even with all the planning and gaming in the world, Google still can’t escape their past failures, including Buzz, Wave and Orkut. Google Buzz was touted as the “Twitter-Killer,” but it ended up enraging people over privacy instead of bringing them together. Everyone seemed to get excited about Google Wave, but it proved to be hard to use and then fell off the face of the earth. Orkut only caught on in India and Brazil.

Google also has to take into consideration the massive issues of privacy with users. Google has always operated as an open information platform, and that could cause a lot of privacy problems with users regarding social networking information.

So which social network would you choose? Facebook is already established with 500 million strong, but has been plagued with privacy problems in recent months. Facebook Questions could also turn out to be a flop. Google is arguably an essential part of our daily lives (Gmail, Gchat, search), but has failed at every previous attempt to establish a social networking service. There’s a lot on the line for both companies. All it seems we can do is wait until October to watch it all play out.