While Goldman Sachs got a lot of press for its brow-raising investment banking work on behalf of Facebook, the big winner so far in the social media sweepstakes has been Morgan Stanley. It has locked in the cream of the crop as far as web 2.0 deals are concerned, including the IPOs of LinkedIn , Pandora, Yanex and HomeAway. In addition, it has been tapped as the lead underwriter in the upcoming offerings of Groupon and Zynga.

According to Bloomberg, much of the credit goes to Michael Grimes and his team, which continues to grace Sand Hill Road. They have worked hard through the drought years, refusing to leave after the dotcom bubble burst and have formed critical relationships that are now paying off. But the biggest prize remains elusive, and the competition will be intense.

For all the work that Goldman Sachs has done for Facebook, there is a sense that it has not completely sewn up the top underwriter spot when it goes public. Goldman Sachs is likely still in the pole position. Recall that it executed a $1.5 billion investment in the social network, buying a $450 million stake at a $50 billion valuation. But it ran into a snafu when it was forced to halt plans to offer shares to U.S. investors days later, amid regulatory concerns. So the door may be open.

Facebook would be wise to diversify. We'll likely see more than one company as lead underwriter. If Morgan Stanley can muscle in, it would certainly be another nice feather in the Silicon Valley office's hat. The deal looms large in terms of bragging rights, and the bake off will be interesting. Not unlike the Google back-off just before it went public.

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