Yesterday, Blue Nile and Wetpaint founder Ben Elowitz hypothesized on TechCrunch that Facebook could kill Google completely by getting into the search business.

I heard the same idea floated at a dinner for tech journalists hosted by scrappy search competitor Blekko a few months ago.

This is completely nuts.

Elowitz is absolutely right that Facebook's collection of social data could be a better indication of search relevance than Google's time-tested PageRank, which measures relevance by links from around the Web.

But why would Facebook bother?

It's absurdly expensive. Indexing the insanely fast-growing amount of data on the Web, ranking it by relevance, and returning results in milliseconds requires huge amounts of expensive special-purpose hardware running in power-hungry data centers. Just ask Microsoft, which has spent the last six years and several billion dollars just to play catch up. Facebook? It just opened its first data center. It's also a much smaller company with nowhere near the billions of dollars in quarterly cash flow that Microsoft and Google enjoy.

There's huge uncapitalized upside in Facebook's existing business. Facebook is approaching 700 million users. Right now, it collects about $2 or $3 per user per year. As David Pakman argued in AdAge a few months ago, Facebook has plenty of things it can do to increase that revenue per user -- better ad targeting to increase CPMs on Facebook's current pages, a more monetizable mobile strategy, a 30% cut of sales of virtual goods, and going after Google AdSense (and other ad networks) with an ad network that uses social data from the Web-wide Facebook Platform. Doing all of these things is not easy or cheap -- but it's a lot easier and cheaper than building a search engine!

Google isn't standing still. Google is well aware that social information can make for better search results -- that's the whole point behind +1, which lets users vote on the relevance of Web sites and search results, then uses those votes and the connections between users (like whether they're in your Gmail contacts) as in input in search.

This isn't how disruption happens in the tech business. Tech markets go through phases. In the early phase, there's lots of competition, but fast user growth lifts all boats. Eventually, though, the market matures, user growth tapers, and a single dominant player emerges -- Microsoft in operating systems, Google in search, Amazon in e-commerce, Facebook in social networking. Once that happens, it's EXTREMELY hard for another player to beat the incumbent by doing the same thing better. Network effects are too strong, and incumbents will spend whatever it takes to stay on top. In fact, I'm hard pressed to think of a single example in the history of high-tech. (Comment if you've got one.)

The way to win is to do something new and different that makes the old incumbent's business less relevant.

That's what Microsoft and Intel did to IBM's mainframe business. That's what the Web (Google and cloud computing vendors) and mobile computing (Apple and Google Android) are doing to Microsoft and the consumer PC market now.

And that's the real threat of Facebook and other social companies to Google. Eventually, users will realize they can get a lot of of the information they need -- particularly shopping recommendations -- without EVER CONDUCTING A SEARCH.

In fact, it's already starting to happen.

As users figure this out, advertisers will follow, and Google will suddenly find that search advertising isn't the gold mine it used to be.