Social networks are hot, but where's all the cash?

According to recent estimates gathered by The New York Times, MySpace has an advertising rate (known as the CPM or cost per thousand) of about 10 cents, which means advertisers are only willing to pay 10 cents for every 1,000 page views. Some Web networks charge as much as $2 per 1,000, and established media sites can charge as much as $10.

Web advertising experts say there are two reasons why MySpace may not be getting as much for its ads: One is that the number of page views it generates seems abnormally large, and advertisers may be suspicious of how valuable each one is; and the second reason is that MySpace is seen as a hangout for teens, who are a notoriously fickle market.

At the same time, however, anyone who is considering either investing in or advertising on a site like MySpace or Facebook has to be thinking not just about the fate of GeoCities and Tripod, but also about a service such as Friendster

What happened? Some analysts believe Friendster didn't have enough features to retain users. It also suffered from performance issues as it tried to cope with phenomenal growth. But in the end, it may simply have been a victim of the shifting enthusiasms of its young audience, who grew up and moved on.