• Silicon Alley Insider, Thursday, March 19, 2009 12 PM

Analyst Ross Sandler of RBC Capital Markets has made waves with a research note claiming that based on its current growth rate, Facebook will surpass Google in size by 2011-2012. Silicon Alley Insider's Henry Blodget notes that this is a "startling" comparison, even though he doesn't believe Facebook can maintain current growth.

Sandler also illustrates how important the social networking giant has become to Google as a source of traffic, as a whopping 19% of Google sessions now come from Facebook. "At the very least," Blodget says, "this will likely give Facebook the leverage to negotiate a sweet referral deal at some point."

Meanwhile, the observation that Facebook could overtake Google in size is "important," despite the fact that the social network still lacks a viable business model, says Blodget. "We think Facebook as the "starting point" for more and more users on the Internet could create some multiple compression for Google over time, if the momentum continues." Why? Facebook's growth has thus far been complementary for Google, which also drives 64% of Facebook's uniques. Crucially, Blodget says that Facebook's growth is actually helping boost Google's search share versus its rivals. "This staggering statistic alone is likely central to all future negotiations for Facebook monetization deals, whether it is with Google, Microsoft, or Yahoo," he says.

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