Larry Page turns 37 on Friday. The billionaire co-founder of Google has a lot to celebrate. In 12 years he and his business partner Sergey Brin have created one of the most powerful companies on the planet, seen off rivals big and small, and emerged as the kings of the internet.

Life in the digital world, however, moves quickly. Last week Page and Brin’s crown passed — for who knows how long — to a 26-year-old rival who has every intention of keeping it.

Hitwise, the internet industry tracker, announced that Facebook had dethroned Google as the world’s most popular website. For the week ending March 13, the social networking site set up by wunderkind Mark Zuckerberg got more traffic than Google in America. It was a milestone likely to be revisited as Facebook and Google limber up for what looks set to be this decade’s defining technology battle.

“Google must feel very threatened by Facebook,” said one leading Silicon Valley entrepreneur last week. “It’s the first viable competitor to emerge since they became dominant. They have come at it from different angles, but the bigger Facebook gets, the more they compete.”

Like all the great tech fights — from Microsoft v Google to Apple v Microsoft — this is at heart a philosophical conflict. Microsoft made its fortune by dominating the PC landscape, but for a long time it sold its products like Henry Ford sold his Model Ts.

It didn’t “get” the internet and chose to dismiss Google as an arrogant upstart. When the world moved online Microsoft was left playing catch-up.

Similarly, Google now faces the challenge of another idea whose time has come.

Google’s algorithms have ordered the chaos of the internet with mathematical exactitude and become the default method for finding things online. Zuckerberg thinks this is all very last decade.

Facebook now has more than 400m active users — making it, some say, the third most populous country in the world behind India and China — and is at the forefront of a new way of finding information. In Britain, it has 23m users, close to one in three of the population.

They share everything from wedding snaps and jokes to film reviews, restaurant and holiday recommendations. “Discovery” is the buzzword in social media — that feeling of finding something that’s been recommended by people you trust. Now Facebook has the critical mass to make discovery a viable alternative to conventional search engines.

“All this data that people are sharing potentially allows social networks to gather this information and use it in interesting ways,” said Augie Ray, analyst at Forrester Research. “When you are looking for a movie recommendation, what you want to know is what people like you think. A bunch of kids who rate Twilight with five stars is no use to me. What about middle-aged men who have shown an interest in art films? What are they watching?”

Another big threat to Google is the fact that much of this information will not appear in a Google search. Google wants everything to be open and searchable, the more information it can mine the more useful it becomes.

Facebook is a walled garden — you sign in to your account and can choose the what, how and who of what you share.

Inside Facebook the attitude to Google seems spookily similar to Google’s attitude to Microsoft. The company would not comment for this story.

“We don’t typically opine on the findings of third-party research firms,” said a spokesman. But privately, the gloves are off.

“Google is not representative of the future of technology in any way,” one Facebook veteran said to Wired magazine, the industry bible, last year. “Facebook is an advanced communications network enabling myriad communication forms. It almost doesn’t make sense to compare them.”

Now it’s Google’s turn to feel the heat from a younger and brasher company. Zuckerberg believes that a billion people will one day be on Facebook. If he hits that number, Brin and Page could face their worst nightmare: Google could be the new Microsoft.

ONLY a fool, though, would write off Google. A closer look at the numbers shows that Facebook has a long way to go before it can be said to be ahead of Google in any real sense.

Hitwise’s figures show that for the week ending March 6, more Americans typed “Facebook.com” into their web browser than “Google.com”. But the numbers ignore Google-owned Gmail and YouTube and the full picture is far more complex — and more favourable to Google. YouTube alone was the fifth most visited website during the period recorded, according to Hitwise, and a lot of its videos end up embedded on Facebook pages.

This is no reason for Google to rest easy, however, and perhaps the statistic they should most fear is Facebook’s astonishing growth. Visits to the site have risen 185% over the past year. During the same period, Google’s traffic rose only 9%.

Nielsen, the analyst, has a different take on the rise of Facebook to Hitwise. By its measurements, Facebook is the third most visited site on the planet with 2.5 billion hits in February compared with Yahoo’s 2.7 billion and Google’s 3 billion.

There is, however, another figure that Google is watching very carefully — the amount of time spent on Facebook. Last month people spent 46.1 billion minutes on the site, according to Nielsen. The firm’s closest rival was Yahoo with 18.6 billion minutes. Google came in third with 11 billion. The analyst calculates that Facebook now accounts for one in every six minutes spent online in the UK and the US.

All this matters because the number of hits and amount of time users spend on a website are what determines the amount of money advertisers are willing to spend on it. Traffic usually equates to revenues.

In some ways Google is less threatened by Facebook’s time eating than some of its rivals. The less time people spend on Google search the better for the firm. It’s about speed. People want to plug in their query, get the results and move on. Google has won its huge following by being the best at that. But if search migrates away from Google, and Facebook starts eating up time spent on YouTube, Gmail or Google Maps, the search giant has a problem.

Alex Burmaster, of Nielsen, said social media was changing the way people use the web to find information, products and services. Stories on news sites such as Times Online are now as likely to be found via a Twitter link or a Facebook post as a Google search, though he added that finding things online is still primarily done through search engines. “The death of the search engine is greatly exaggerated,” he said. “But when it comes to time, it’s not just Google that Facebook is challenging, it’s every website out there.”

ODDLY, as Facebook gets bigger, the internet is looking smaller. Facebook and Google (with YouTube, and Gmail) now account for more than 17% of internet activity — nearly one web visit in every five. The runners up are losing ground, leaving the possibility of a world where Google and Facebook slug it out as the Coke and Pepsi of the internet universe: both sides battling for the title “The Real Thing”.

Google has made several unsuccessful attempts to head Facebook off at the pass. The firm lost out on a deal to Microsoft. It made a pass at Twitter but was rejected, and its latest solo effort — Buzz, a social media service attached to its huge Gmail email service — suffered a disastrous launch.

Email users found they had been signed up unwittingly and personal information had been shared with their contacts. Last week, Pamela Jones Harbour, the US Federal Trade Commissioner, slammed the launch as “irresponsible”.

It’s still early days for Facebook, no matter how many fans it has. The private company expected to generate $1 billion (£666m) in revenue this year. Google’s sales in the last quarter alone were almost seven times as large.

Kurt Scherf, analyst at Parks Associates, said it would be foolhardy to count out Google. In terms of making money “those cold calculating algorithms that Google turn out are still way more effective than people at the moment,” he said.

But he acknowledged that social media was creating enormous new possibilities for Facebook. “One of my interests is interactive TV. Imagine how powerful it would be if Facebook is on your TV telling you 80% of your friends like a certain show,” said Scherf. “The big question is who is going to mine this information. In terms of pure revenue we are not seeing the execution from Facebook. I’m not saying that they can’t get there, but it’s not happening at this point.”

Google had its doubters too.

How to become the net’s biggest draw

1984: Mark Zuckerberg is born in White Plains, New York.

2004: In February, Zuckerberg and co-founders Dustin Moskovitz, Chris Hughes and Eduardo Saverin launch Facebook from their Harvard dorm. The site is for students with Harvard email addresses only, but by March it has added Stanford, Columbia and Yale. By December Facebook has 1m users.

2005: Facebook raises $12.7m from Accel Partners. It adds high schools and international school networks. By December it has 5.5m users.

2006: Facebook raises $27.5m from Greylock Partners, Meritech Capital Partners and others. Facebook Mobile is launched. By the end of the year it has 12m users.

2007: Facebook opens a virtual gift shop and advertising becomes a growing part of the business. Developers are invited to make applications for the site. In October Microsoft pays $240m for a 1.6% stake in Facebook, valuing the company at $15 billion. Microsoft squeezes out Google to do the deal. User numbers pass 50m.

2008: Facebook passes the 100m mark. It opens Spanish and French sites and a translation service for 21 languages. The US presidential debates are co-sponsored by ABC News and Facebook.

2009: Even Facebook isn’t immune to the stock market rout. Digital Sky Technologies, a Russian group, makes a $200m investment that values the company at $10 billion. However, the number of users continues to soar — to more than 350m by the end of the year — and Facebook makes its first profit.

2010: For the week ending March 13, Hitwise says Facebook.com passed Google.com, making it the biggest draw on the net for the whole week for the first time in its history. The company now accounts for 17% of the time people spend online in Britain and America, according to Nielsen. User numbers have passed 400m. Profits are thought to be $1 billion a year. Speculation mounts that Facebook will start looking to raise more money from a stock market float.