There is a war on – Facebook and Google are fighting over the control of your identity on the web. It’s been rumoured that Facebook will announce a web-based email service – basically email addresses for everyone at a press event scheduled for Today. At Facebook internally it’s known as Project Titan and unofficially the Gmail killer!

You may not be aware but Google changed its terms of service last week so that anyone using its Contacts API must export their contacts back to Google. The Shared Contacts API allows applications to retrieve and update contacts that are shared in the Domain – in this case Google Apps. In other words, a company or social network can allow users to import their Gmail friends.

Facebook, however, doesn’t allow Google users to import their Facebook contacts for products like Gmail, Buzz or Orkut. So Google has blocked Facebook’s access to its Contacts API. Following Google’s decision to deny Facebook API access, Facebook decided to give users an easy option to download their Gmail contacts and then upload them to Facebook. Game On!

The Google vs. Facebook Battle

So what are the stakes? World internet domination! Whichever company controls identity on the web, controls the web. Email is all about identity. And Facebook is ahead of everyone else in the identity game via Facebook Connect. Facebook says more than 60 million people log in to 80,000 third party websites each month via Facebook Connect.

Currently Facebook and Google dominate third-party sign-in options on the web, but Facebook’s growth as an identity platform is accelerating alarmingly. Some of this is thanks to the explosive growth of the Facebook Open Graph (that’s the thing that lets you easily put like buttons on posts and become a fan buttons on websites).

Facebook has become so powerful that Google has been prompted to introduce some big social tools of its own. It recently acquired Slide and Angstro, for Google Me, the search giant’s rumoured next attempt at competing with Facebook. Many now believe that Google is not just planning to compete by introducing a new Social Network but is developing more social features into everything.

Google is definitely planning something BIG because Facebook, the world’s largest social network is increasing its domination of the web. Google can’t afford for Facebook to control identity on the web.

According to Chris Saad co-founder of DataPortability Project:

“Facebook has been a one-way beneficiary of data portability for far too long. Google asking for reciprocity from equal peers on the Internet is a perfectly reasonable, if not overdue, move.”

Facebook won’t be using Gmail contacts anytime soon and don’t hold your breath for Facebook Connect on Google. Meanwhile users need to take the extra steps to upload his or her Gmail contacts into Facebook, and the millions of users won’t get the benefits of Facebook integration in Google or Gmail.