Google accused Facebook of siphoning up Google data without allowing for the automatic import and export of Facebook users' information.
They are also increasingly vying for engineering talent in Silicon Valley.
Commenting on the launch, Eden Zoller, principal analyst at Ovum, said: 'An email service from Facebook makes a lot of sense.
'It has a huge base of 500million users that already love to communicate and share, and Facebook is giving them richer ways to do this through virtual gifts, games, location and even voice thanks to the recent integration deal with Skype.'Adding email to the mix is a logical step and Facebook could tap into user data to provide an attractive, highly personalised service.
It was estimated by Bloomberg that the boss of the world’s largest social media network lost .3billion off his net worth on Friday.
Facebook shares fell 4.5 percent on Friday after the closing bell on Wall Street.
Even though Zuckerberg denied this was the case, Facebook’s 500million users will mean it poses a huge threat to all its competitors. have 362million and 273million users respectively compared to Gmail's 193million.
Facebook’s new email system is modelled on instant messaging and on-line chat and will allow people to simplify their communications regardless of how they choose to do it.
One person could text a friend, for example, who will see the message come up on their Facebook page instantly and respond via an instant message or email. along with all the different ways you want to communicate.'It’s true people are going to be able to have email addresses but this is not email.
Entire conversation histories going back years will also be saved into users’ accounts and spam will be completely filtered out, he claimed.'We don’t think that a modern messaging system is going to be email,' Zuckerberg said at a press conference in San Francisco.
'We want people to be able to communicate in whatever way they choose: email, text or Facebook message.'Speculation had been mounting that Facebook’s email account would be a ‘Gmail Killer’, in reference to Google’s successful email service.
The 26-year-old said it would go the way of the letter because it was too slow and too formal.
In its place he showcased Facebook’s own version which integrates all web and text-based communications.