San Francisco has tempted successive generations with the promise of gold, free love, Internet riches, and a utopian ideal that money alone can't buy. Karl Taro Greenfeld sidles up to a siren

Google and Facebook are going to fight. It's all anyone can talk about. The two of them have been jockeying for attention, and now the rivalry has reached the point where a throwdown appears imminent.

I'm at a Halloween party in San Francisco's Noe Valley, in a three-story house packed with tech company employees, the girls who date them, and the guys who want to finance them. The two young gents dressed as the competing Web powers—Facebook all in white, with the site's trademark features silk-screened onto a T-shirt; Google also in white, with eyeholes poked through the O's—have been feuding for a while (something about an indiscreet posting on a now defunct social-networking site). The two of them—drunk and staring each other down in the teak and stainless steel kitchen—have to be pulled apart by more conventionally outfitted revelers: a ninja, Lil' Wayne, and a woman I'm guessing is an Oompa-Loompa.

Costumes begin to deteriorate as more drinks are consumed and guests keep arriving: A cat's tail is shorn under the boot of a Blackwater employee ("Immune from prosecution since 1997"); Supergirl's cape is discarded after being covered in bourbon. The conversation, though, stays focused on Web 2.0—the industry and culture that are driving and reviving San Francisco. "Did you get pre-IPO stock?" "What's the lockup?" "If you were one of the first hundred employees, you're worth a hundred million today…"

Surely we're all going to cash in, those of us lucky enough to be in this house, in this neighborhood, in this city at this exhilarating time. The tech industry, and hence San Francisco, is again dreaming big. The product of a thousand code-writing quant poets—millennial Ferlinghettis and Ginsbergs—is geysering into the ether just down the block. The neighbors are launching their own multibillion-dollar ventures, funded by the money czars on Sand Hill Road and executed in the office parks of Mountain View and Redwood City. You'll be employee number twelve at your friend's start-up and cashing out with a bundle while you're still young enough to travel the world and mingle with the cool kids. The twentysomething guy who owns this house has done just that—made a killing selling his business to a bigger company—and now he's no-worries wealthy, standing by the dining room table sloshing bourbon onto Supergirl.

For a visitor, it's all so inviting. Why can't every one of us come to San Francisco, as generations before have, chasing the latest iteration of the American dream, the freedom to reinvent ourselves and—why not—strike it rich? But unlike California's other oasis of reinvention, Los Angeles, this is a real city, comforting in its compactness, its verticality, its bustle. Thousands of foot soldiers are pouring in from around the country, lured by the Web 2.0 boom and staying because they find a place that is even more livable than San Francisco 1.0.